Using IDEA 7.0.5 with the latest JetGroovy plugin, I can't get the grails module withing my project to recognize grails-1.1-beta1 as a proper Grails SDK. When I try, it just reverts the dropdown back to no SDK. Grails 1.0.4 works fine though. If I had more insight into how JetGroovy validates that this is a Grails distribution then hopefully I could trick it, short of fixing JetGroovy to recognize 1.1 projects.
Grails user list thread for reference: http://grails.markmail.org/search/?q=jetgroovy#query:jetgroovy+page:1+mid:64pimkaspmusqiuq+state:results