I was in a similar predicament, only I was unemployed at the time. 2 companies were interested in me at the same time and had interviews about the same time. In my experience, if a company is interested in you during or after the interview, they will ask if you have any offers or are interviewing with anyone else.
I was upfront with both that I was interviewing with another company. IMO, this created a perceived demand for me. One company was a shorter commute for less money than the other, so I played that demand. They offered me $X/yr. but knowing that the second company was paying at least $10k more than that I ended up negotiating $5k more than the first company's initial offer.
My advice is to keep your options open until you have all the information you need, including any offers in writing. If the lesser paying company with the shorter commute is the best fit for you, then ask them to up their offer.
Good luck!