Just checked REI on both of the bikes you listed. The 1.2 is a nice upgrade....but is it worth spending $350 more....well, I probably would think it is but would also probably wait until REI has a sale on it to push the price down a bit.

Reality is the 1.1 is a perfectly fine bike for that price. Looks like it would be a fun bike to ride on. So you have to ask yourself, are you going to regret not getting the better bike? I have not heard of anyone getting the better bike and stating, I should have bought the cheaper bike. But then again, depending on how you ride, the 1.1 is perfectly acceptable and may make your wallet happier.

I have found that all bikes under $1000 don't necessarily have the strongest wheels on them. Not sure if you would see a difference between the wheels on the 1.1 and the 1.2.

Hope this helps and not leads to more confusion.