|Yes, unfortunately the iPhone Mail program does not allow opening or doing anything with the meeting attachent. Which is strange, because the version in the iPad does allow opening it if you have an app that can handle them. Here's hoping iOS 4.2 will resolve this when they support iPhone and iPad with the same version.|
I was having the same problem. It seems not to work right unless you are connecting to an Exchange server.
So, I wrote an iPhone app as a workaround to the issue. It's called Calendar Happy. If you try it, I hope you find it helpful. Please let me know what you think. It doesn't send a confirmation to the meeting organizer yet, but it does allow you to add it to your iPhone calendar and read the details.