I continued my search for a solution and didn't find one. I checked the shared calendar properties to make sure both users had the same permissions (which they we identical) and made sure the settings for the calendars we the same (which they were) so, I started to look for a solution (on the web) and used an idea from reading a blog that had me updating the color categories in the mailbox properties. I checked this out and that user claims that when the shared calendar appear in his Outlook, it had the color categories showing (and claims that his categories list changed to match the shared calendar when he accepted it). She told me that another person in her department received the same invite two months ago and he has the color categories showing in the shared calendar. She got the calendar however, no color categories appeared.
I have a 2010 Outlook client that shared a calendar to an Outlook 2007 user via email invite.
