Since the Calendar is a special folder causing a lot of trouble, I thought it might be useful to talk about assigning permissions and the changes you should expect to see in Outlook 2007 running against Exchange 2007.
The purpose of this post is to clarify the difference between Free/Busy permissions and the actual Calendar permissions. Free/Busy permissions refer to the level of details that another user can see when inviting you to a meeting, while Calendar permissions refer to allowing others to access your Calendar folder (actually open it and look inside). Unfortunately, with Outlook 2007 and Exchange 2007, both types of permissions are assigned from the same place, which may be confusing.
To start with, you will see two groups by default in the permissions tab: Default, referring to authenticated users in your organization and Anonymous to users outside of your Exchange organization. You only need to add another user in the list if you want to grant him a different permission level than the Default group has.
Back in Outlook 2003, everything was clear:
You would add a user, and allow him to: Create Items, Read Items, Edit Items, Delete Items, Create subfolders, see your folder or a combination at your choice.
In Outlook 2007 running against Exchange 2003, the permissions tab looks slightly different, but in the end it's the same thing.
In Outlook 2007 running against Exchange 2007 or later however, the "Free/Busy" permissions showed up in the list and might cause confusion:
You will first notice that the default permissions are changed for the Default group, to Free/Busy time. And then you may wonder what does this setting allow other to do in your calendar: the answer is NOTHING.
The "Free/Busy time" and "Free/Busy time, subject, location" permissions only apply when checking the user's free/busy information (for example, when looking in the Scheduling tab of a meeting request) and not when looking in another user's Calendar folder. If you add a user and you grant him Folder Visible permissions so that he can open your Calendar folder and, in addition, "Free/Busy time" or "Free/Busy time, subject, location" permission, when opening your Calendar folder, he will not see anything.
In conclusion, "Free/Busy time" and "Free/Busy time, subject, location" only applied for free/busy and can be granted independently from the "Folder Visible" permission. "Free/Busy time" will only allow a user (or group of users) to see when you are free and when you are busy (busy times are marked in blue) when scheduling a meeting; "Free/Busy time, subject, location" will allow the user to also see the subject and location of your busy times (other appointments or meetings).
Happy Outlooking!