Not sure if I introduced any negative side affects, but I replaced the PR1.1 keyboard plugins and libraries with the previous versions and I now have capitalization, space and backspace swiping back. I saved and copied over the following files, and then I rebooted:

/usr/lib/hildon-input-method/hildon-im-plugins.cache
/usr/lib/hildon-input-method/hildon_im_keyboard_monitor.so
/usr/lib/hildon-input-method/hildon_keyboard_assistant.so
/usr/lib/hildon-input-method/hildon_keyboard_assistant_scv.so
/usr/lib/hildon-input-method/hildon_western_fkb.so
/usr/lib/hildon-input-method/western_common_vim_settings.so
/usr/lib/libhildon-im-vkbrenderer.so.3
/usr/lib/libhildon-im-vkbrenderer.so.3.0.2
/usr/lib/libhildon-im-western-plugin-common.so.3
/usr/lib/libhildon-im-western-plugin-common.so.3.0.8

I'm not sure I can post the old files here, but if someone with authority says it's okay I would be happy to.

I wrote this post with the old files listed above on PR1.1