Accepting an iCal invitation

Support for this was first added in a post Service Pack 1 Hotfix for Outlook 2007 and later in Service Pack 2 as well so I suggest that you first check that Outlook is fully up-to-date before attempting this fix. Outlook 2010 also offers support for this.

ExtractOrganizedMeetings Registry Key

Once updated, you’ll have to add the following Registry value;

Key: HKEY_CURRENT_USER\Software\Microsoft\Office\<version>\Options\Calendar 
Value name: ExtractOrganizedMeetings 
Value type: REG_DWORD 
Value: 1

When this key is missing or set to 0, then you cannot accept meetings that have been sent to you in a 3rd party/unknown calendar format. 
When this key is set to 1, then an attempt is made to interpret the 3rd party/unknown calendar format so you can accept it.