*sigh*
Unfortunately my idea for rerouting assemblies to 1.0 programmatically does not work. The problem is that there is not currently a way to unload an assembly (to the best of my limited knowledge). If you could, what I would do is prevent it from trying to unload the referenced assemblies and load the 1.0 assemblies instead.
What REALLY needs to happen (and I'm surprised MS hasn't figured this out already) is that there needs to be a <Assembly: CLRCompatibility> attribute available for the AssemblyInfo.* file that allows the developer to programmatically determine whether the assembly will try to run against 1.1, 1.0, or can run on both. Then server controls and other file.config-less classes can still have version compatibility information.
Also missing is a compatibility tester from MS that will load up your assembly and tell you whether it will run against specific versions of the framework or not.
I guess what I REALLY hope is that people that work at MS <*ahem* Scoble, Sells, ScottGu, Rob, Don, et al. /> might catch a glance of this blog entry and figure out how to accomplish what I just stated. Maybe a non-b0rg could figure it out as well? One can only hope.