MobileMe doesn’t achieve this. iCal shared calendars via itunes doesn’t achieve this. After much experimenting I found the best way is through Google calendar.

Google calendar allows editing and viewing from iCal on your mac and from your iPhone, plus you can let anyone else edit your calendar if you want them to. So Google calendar becomes the hub. Here’s how it all works:

STEP 1. GET A GOOGLE CALENDAR ACCOUNT.
You can set up a new calendar in Google at http://google.com/calendar

STEP 2. SYNC ICAL WITH GOOGLE.
Google has released a program called calaboration that will automatically put all the settings for your Google calendar into iCal. Download and run calaboration. It looks like this, you just select the calendars you want to add into your iCal account.

STEP 3. SYNC IPHONE WITH GOOGLE

If you have iphone version 3 you can just use the built in CalDAV to access your Google Calendar. Go to Settings then Mail, Contacts, Calendars then Add Account then Other then Add CalDAV Account.
You’ll see a page like this:

Enter the settings for your google account here and that’s it!

NOTE – More than 1 Calendar.
If you have more than one Google Calendar you’d like to sync, you need to copy the URL of the calendar from ical across to your iphone. To do this, AFTER you have used callaboration to put the google settings into ical, go into ical, preferences, Accounts, Server Settings – it looks like this.

You need to type that URL into the ‘Advanced Settings’ – ‘Account URL’ of the Calendar on your iphone. It’s quite a long text so the easiest way is to copy it from ical into mail, mail it to your iphone, copy it out of mail and paste it in.

NOTE 2: Old iphone software.
If you have iphone software version 2 you’ll need to use Nuevasync. You set it up in your iPhone as a Microsoft Exchange server that points to Nuevasync. You can sync directly from google to iphone but all the calendars come across as one calendar. To choose which colors the calendars are on the iphone, you need to enable them one at a time from neuvasync, checking the iphone calendar each time, and they will import into the iphone in order of the following colors: red (first calendar) , orange (2nd) , blue, green then purple. eg the first calendar you enable will be red, and so on.