I know this is a very old thread, but today's (7th February 2013) release of Totara 2.2.14 includes major changes to timezone handling, especially for Facetoface sessions, including session dates having their own timezone selector, with the resulting proper calculation of Daylight Savings adjustments including in the iCal attachments.

I doubt we'll be backporting the changes to Totara 1.1 at this stage though as Moodle 1.9 is nearing end-of-life.