My first impression is that is looks pretty solid. I think even the "low-end" Treks used lightweight steel tubing and are pretty good quality. Yours doesn't really look all that rusty, at least on the outside. You should pull out the seat post and shine a light down into the frame to see how it is inside. You'll need a special tool to remove the cranks, but they are cheap. If you clean up the frame and touch up the rusted spots it will probably look pretty nice. Do get a new chain though. It looks like somebody painted part of the fork already. There is an anti-rust treatment called Frame Saver that you can apply to the interior of the frame, lots of folks here use it.