Boy, do a Google search on this one, and you will be amazed at all the hits.
This is an Enterprise issue, so you can probably ignore this if you are using Outlook for POP over the Internet. The basic problem is other people (on the same Exchange network as me) do not see the times I have blocked out as busy (for meetings) when they are scheduling a meeting request that includes me. My free/busy times are not making it to Exchange somehow or other. I should also note that my default mail store is a local PST rather than an Exchange mailbox.
One of the first recommended fixes is, from the Run Dialog, outlook.exe /cleanfreebusy . I got another error upon running that, “Unable to clean your local free/busy information”.
There are a lot of other troubleshooting steps that are recommended, both from the user side and the Exchange admin side. However what helped me was very simple, if unsatisfactory. Under the Exchange account configuration, I turned off “Use Cached Exchange Mode”. After that I was able to run outlook.exe /cleanfreebusy without errors, and the issue was resolved. Not a trade-off I am happy about (losing Cached Exchange Mode), but better than ending up with 3 meetings in the same slot.
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