Update json to 1.7.7

Older versions of the json gem had vulnerabilities discussed at
https://groups.google.com/forum/#!topic/rubyonrails-security/4_YvCpLzL58/discussion
Merge pull request #148 from jstepien/fix-json-vulnerability

Update json to 1.7.7
Update Rails to 2.3.17
Merge pull request #149 from jstepien/rails-2-3-17

Update Rails to 2.3.17
upgrade to include security fixes