From my personal experiences in Turkey I found that the country was a lot more liberal and 'Western' than most destinations in the Middle East. Especially in Istanbul, you'll see lots of women in Western dress. However, I think its best to keep yourself well-covered to avoid unwanted attention from men. Wearining jeans or long trousers/skirts will be fine.
Its not necessary to wear a headscarf but always dress appropriatley when visitng mosques or religious places, as a sign of respect.
I think you might find the Expat Arrivals page on Culture shock in Turkey quite useful.
Do let me know if you have any more questions.