Support identified my problem as
Bug 38112 - Creating appointments in iCal does not send the invite
It's fixed in 5.0.17. Comments in the bugzilla entry agree with my observation that the bug is associated with Leopard 10.5.7, so if someone can't wait until the update, I guess they'll have to downgrade their Mac using Archive & Install. Fortunately I was able to warn most of my users in time to hold off the upgrade.