My husband and I both have iphone 4's and we both have this same problem. I have an open ticket with apple, but so far they haven't been able to figure this out. First, they told me the problem was the mail server I was using. So, I tried sending/receiving invites from gmail and yahoo which they told me should work. Neither did. It doesn't matter whether the original invite was created in iCal or in Outlook or Google, once I open the invite in my mail and hit "add to calendar" the event is locked into my calendar. If the originator sends an update or cancels the meeting, I will receive an email with the new info, but the event doesn't change in my iphone calendar. This is completely lame. Why bother putting a calendar app on the phone if it can't handle basic functions?
Did you ever get a response from anyone or figure out a workaround? I'll post if I hear back from Apple with a fix.