I downgrade using win restore (be sure to turn off opt-in).
In turns of custom factions, so far I've been having a lot of luck moving items between 1.03 and 1.1, deleting a faction is an entirely different story in 1.0.3 
That said, 1.1's annoying missing custom-ship bug is driving me nuts... I have to built all the 'hyperion buildings' and some of my ship 'MAY' show up... I am sure a bug has been filed on it already... I can only hope they will fix it with the official 1.1 release