Out look calendar sharing problem

Hi,

i am getting an issue with outlook calendar sharing.

one of my employee need to see my calendar so she was requesting for sharing. when i accept the share it is giving error.

i tried to add her in my calendar permissions. when i search her name it is displaying with an error icon on her name, even though i select her and click ok. it is giving an error message  'One or more users cannot be added to the folder access list. Non-local users cannot be given rights on this server'.

i am using outlook 2010, she was using outlook 2007.

can some one explain me what is that error about to.

thank you,

krishna

Krishna Gummadapu