I have a Trek WSD 1600. With 650c tires.
The smaller tires are really the key for me. I am only 4' 10" 1/2.
And the bike is perfect for me!

the bike is a 2007 model and I bought it new just about a month ago. I know that the Trek WSD's are above your budget. But think about spending more than you originally wanted to. Because if you spend $300 or $400 on something that isn't great, it is better to spend $800 or $900 on something you will love and want to ride every day. I originally was going to get the Trek 1.2 WSD model, but the bike shop happened to have one of the WSD 1600 there and I went ahead and shelled out the additional bucks for it.
But the Trek 1.2 is around $900 I think, and seems to be a good bike.