I think that you may be able to do this with the new Google Calendar. You can have multiple people on a calendar and can subscribe to the Google Calendar through iCal.
The other option could be 37 Signals Basecamp, which is very powerful and they make it available for free for teachers (which is one of the things that you are). I've tried it out and it works well, but it's a more comprehensive project-management system. Google Calendar may work better for scheduling and it is free and collaborative.

I seem to recall Bruce showing this to me once when I visted Indiana...

We use iCal in this way, and it's marvelous. I have my iCal, Ethan has his, we subscribe to each others' -- and I can even export one or both to my Palm so I can keep track of where we are when I'm not at my desktop.

I'm with Chris. 37 signals is the way to go.

I apologize for being late to this conversation. It seems to be my lot in life lately.

1) I checked out Basecamp from 37Signals. Even signed up for the free account to do some real testing. It looks like a very nifty project management tool. A bit thin on iCal integration though. For example, it requires Export/Import from iCal rather than using the Publish feature. Also, Subscribing to Milestones brings them in to iCal as all day events rather than allowing for time of day.

2) Google Calendar has the same Publish/Subscribe issues as Basecamp. In addition, Google Calendar is a bit worrisome just because of Google's pervasiveness. Not that I don't trust them, but...

3) ical Exchange (www.icalx.com). This is the one that Susie mentioned above (btw, thanks Susie!). I have been using this free WebDAV service for several years now. It allows for private and public sharing of calendars - your choice by calendar, via the iCal interface. Allows for calendars from multiple people. Handles Publish/Subscribe 99%. Not 100% just because it has a quirk that sometimes requires the user to manually refresh and/or re-enter the password during the refresh. Annoying but livable. Other than that, it it flawless. The web page appears really old and hasn't been updated in years, but it works great. So who cares?