Do you know your environment? Number of servers, where components will be installed, the OS, the webserver, the app server, the authentication source??
None of the components in the install is optional. You do have flexibility in how to install (what components where), as well as if you want to use Tomcat or a different app server.
I recommend reading both the architechure doc and the install and conf doc, both available from the cognos website.
As for versions 1.1Mr2 is the most current.