Step 1: Apply the Master Theorem
The recurrence relation is $T(n) = 2T(\frac{n}{2}) + 1$.
This fits the Master Theorem format $T(n) = aT(\frac{n}{b}) + f(n)$ with $a=2$, $b=2$, and $f(n)=1$.
We compare $f(n)$ with $n^{\log_b a} = n^{\log_2 2} = n^1 = n$. Here, $f(n) = 1$, which is $O(n^{1-\epsilon})$ for any $\epsilon > 0$.
This corresponds to Case 1 of the Master Theorem.
Step 2: Determine the asymptotic complexity
According to Case 1 of the Master Theorem, if $f(n) = O(n^{\log_b a - \epsilon})$, then $T(n) = \Theta(n^{\log_b a})$.
In this case, $T(n) = \Theta(n^1) = \Theta(n)$.
Answer: The correct option is $\mathbf{\Theta(n)}$.