Trek makes great bikes. Even their lower end models are decent bikes. Much better than any department store bike. From what I've read here, though, the Shimano 2300 components (on the Trek 1.1) don't get good reviews. The Trek 1.2 has much better components. If you could find a 2011 Trek 1.2, it might fit into your $500-700 price range. If you have a Performance bike or REI near you, it might be worth a look. Those stores have bikes without the bike brand names, but still have Shimano components. These bikes are often cheaper than the offerings from Trek, et all. Fuji, Novara and Scattante have offerings similar to the Trek 1.2.

I do think that you could get a really nice bike from CL in that price range. But you don't get someone to help you with sizing, etc. I'm not sure I would buy a high end bike from a stranger on CL, but for your price range, you can probably find a 3 year old bike in good condition.