Meh...that KHS, from what I see on Bikepedia, is a low-end mountain bike- which I don't think is what you want? Seems to have a mix of mish-mashed low-end components..... Looks to be about like a Walmart bike.....just with a higher price.

Have you actually been test-riding thee bikes on the street? You need to. On the trainer will tell you something about fit....but if you don't actually ride 'em on the street, you will not get the right bike. (That mountain bike will be slow and inefficient for pavement riding).

Have you ever checked out the bikes at Bikesdirect.com? You can get a lot more bike for your money there....

What I did a year ago when I was wanting to get my first road bike, was to get this:
http://www.bikesdirect.com/products/..._al_xi_sc2.htm
Figuring it'd be cheap, and yet equivalent to what I could get at an LBS for about $800....and that way i could use it to get used to riding, and over time I'd learn what I really needed/wanted in a better bike. 3000 miles later, I still enjoy riding it, and I am now more flexible and more comfortable being on a drop-bar bike, so I just bought myself a more agressive "racing" bike (even though I don't race).

It sounds like you're in the same boat I was in- not really sure of what you want/need, or of sizing and fit. A bike like that, just to start out with, or a cheap used bike for around the same price, might be your best option, to get all these things sorted out.

I'd also do the Competitive Cyclist fit calculator, so you could really see what's going on with your sizing- and that way you'd know at least if you're in the ballpark with fit, or if it's just a matter of not being used to a roadbike's geometry and drop-bars, etc.