I've seen it discussed on here before that although the official steerer size for most recent Trek 520 model years has been 1 1/8", many of the smaller frame sizes came with 1" steerers. This was the case with mine, it's a 2002, and the specs say 1 1/8", but the steerer is 1". There doesn't seem to be anything special about the headset because I changed it a couple of years ago from the stock loose-ball headset to a new cartridge headset, and a regular 1" headset did the job just fine. There's a chance that your 2008 version is different, but I think it's pretty unlikely.
That Dimension fork is one of the few decent-priced options that I found, but the low rake put me off. As I said, I already find the 520's steering very unresponsive, and would not want to make it any more so. If you can find anything with a longer rake, then I'd take that instead, even if it doesn't have disc brake tabs.