At the moment we use outlook and sent meeting invites via email and they are added to our calendars automatically. Can invites be sent the same way to a sharepoint calendar? I notice an incoming email option but wonder if it can handle invites and post them on the calendar correctly. How do I do that?
No. Managing meeting requests from SharePoint does not work as you would think. See second paragraph here.
Your best bet is to use Outlook to send out meeting requests and synch these events back to SharePoint.
Even when you use Outlook to manage a meeting request and synch the meeting to SharePoint, you still come across issues, for example with meeting workspaces:
1) Whenever a recurring event changes (a recurrence exception), the meeting workspace for the original recurring event gets orphaned.
2) Changing attendees in Outlook doesn't always get updated in SharePoint.