Nearly there with the Bedework project but just one last hurdle in terms of getting Outlook to see all the headers correctly. Squirrelsewer has one answer to the problem (basically Outlook 2007 doesn’t appear to like iCal headers very much) but I think it’s over engineered. Bedework’s core mailer takes a simpler approach so back to battle with that one.
Update: Actually there’s another step. You need to force the Mime mail header (text/calendar;method=request;charset=UTF-8) and also ensure that the Mime email message is set to alternative as well so that Outlook doesn’t get confused.