I've rented a 1.2 a couple of times. Once for riding 250 miles over a week in Oregon, including some serious pass riding - steep ups and very fast and long downhills. The bike performed really well and was very comfortable. For no other reason than to give my perspective, I ride an upper end aluminum cross bike as a commuter and a fairly high end carbon fiber lightweight road bike. I was perfectly happy on the 1.2 Trek.
That frame (which is the same as several other Trek, I think) is really well designed for a beginner, or any other recreational rider for that matter. It has a relatively tall-ish head tube which makes it easier to put the handlebars in a comfortable position.
I'm not a big fan of Trek (just a personal thing), but I think this frame is a good one for any recreational rider, especially a beginner.
As for the quality level of the components. Yes this bike has pretty low level Shimano components (the ones I've used had Sora). They worked fine, and if you're a normal user, will probably always be fine for you.
The only issue is if you want a little better quality in the wheels and components, then go up one level to the "Tiagra" level. But I believe that bike will have the same frame and fork, so that wouldn't be a factor, only the components.
The Sora shifters on the 1.2 are unique among Shimano in that they use a differnt shifting design than all the other Shimano levers. The size and the way they feel under the hand is distinctuvely different too. Some actually prefer Sora, some distinctly dislike it. For most, it's not a significant factor. My wife has used both Sora (same rental situation as me), and currently owns a bike with Tiagra, and while she doesn't really care that much, told me she prefers Sora. That would be the primary consideration in my opinion and it might be worth trying both to see for yourself.
But, in my experience, if the 1.2 is all you can afford I really think it will work fine for many years. When you set your budget, remember, there'll be other stuff you need to buy too - helmet at a minimum, but maybe one or more pair of shorts, jersey(s), maybe some shoes and pedals, water bottles and cages, a repair kit, a pump.
