To get around this problem i generated the iCal file one the server side and exposed to the Client via a RESTful webservice.
In order to identify the response as of type calendar i set the following
ResponseBuilder builder = Response.ok();
builder.header("content-disposition",
"attachment;filename=calendar.ics");
When IE8 receives the response it automatically attempts to download/open the file using my default Outlook instance.
This works across all browsers. It does have the overhead of requiring the request to the server however it also lets me apply extra processing on the request like validating the conference room is valid etc.