how do I downgrade rails version?

$ gem help commands

will show you your options.

You can uninstall the rails gem and dependencies of: actionmailer,
actionpack, actionwebservice, activerecord, and activesupport.

$ sudo gem uninstall <gem-name>

There might be a faster one-line but I don't know it off the top of my
head. Then just use the version flag when installing rails 1.1.6.

$ gem help install

will show you the options.

Hope this helps.