It's not too well documented, but Googling around I see that I'm not the only one needing to pop out this stuff from a custom app.

To cut to the chase

using System.Net;
using System.Net.Mail;
using System.Net.Mime;

ContentType CalendarType = new ContentType("text/calendar");
CalendarType.Parameters.Add("method", "REQUEST");
CalendarType.Parameters.Add("name", "meeting.ics");

string body =
"BEGIN:VCALENDAR\n" +
"PRODID:-//Microsoft Corporation//Outlook 11.0 MIMEDIR//EN\n" +
"VERSION:2.0\n" +
"METHOD:REQUEST\n" +
"BEGIN:VEVENT\n" +
"ATTENDEE;RSVP=TRUE:MAILTO:unused@mail.com\n" +
"DTSTART:20090304T000000Z\n" +
"DTEND:20090304T013520Z\n" +
"UID:4639843788467846786478364\n" +
"DTSTAMP:20090304T013520Z\n" +
"DESCRIPTION:appointment description here" +
"BEGIN:VALARM\n" +
"TRIGGER:-PT15M\n" +
"ACTION:DISPLAY\n" +
"DESCRIPTION:enter\n description here\n" +
"END:VALARM\n" +
"END:VEVENT\n" +
"END:VCALENDAR\n";

AlternateView view = AlternateView.CreateAlternateViewFromString(body, CalendarType);
view.TransferEncoding = TransferEncoding.QuotedPrintable;
MailMessage mail = new MailMessage("sender@mail.com", "recipient@mail.com", "mail header", "body");
mail.AlternateViews.Add(view);
SmtpClient smtp = new SmtpClient("smtp.mail.com");
smtp.Credentials = new NetworkCredential("username", "password");
smtp.Send(mail);

A few words about the code

1. MailMessage does not support directly adjusting the ContentType header. So the only way out is by appending a view to the message, and setting the ContentType for that view.
2. One has to be careful with taking out seemingly unused information in the VCalendar string. Til now I'm not sure why I have to include the MAILTO attribute, seeing that both Thunderbird and Outlook do not use it. Things like PROGID is also sensitive to Outlook.
3. This method does not work in older Outlook (iirc 2000 and before), which uses a proprietary appointment format.
4. If your DESCRIPTION is going to be more than a line long, remember to add a space at the start of each line, so Outlook knows it's still part of DESCRIPTION. A new line in the body != a new line in the description. Break up the lines yourself, because Outlook does not like it the way MailMessage does it.
5. UID needs to be different every time you generate a new appointment. Outlook uses this as the appointment ID. You take responsibility for making sure no 2 appointments generate the same id. It's not that hard.
6. The code is mostly complete. But don't expect to copy-n-paste and expect it to work. Some basic C# experience is required.

Compatibility
The above code has been tested to work with both ThunderBird 2.0 and Outlook 2003.

Ref
http://weblogs.asp.net/bradvincent/archive/2008/01/16/creating-vcalendars-programmatically.aspx