A calendar is a subfolder (if you will) of a mailbox that is set to contain appointment items, just as the Inbox is a folder that is set to contain mail and post items.
Basically, permissions are two-tiered. You can grant permissions to a mailbox, then you need to specify additional permissions at the folder level. There is no permissions inheritance. By default, nobody will be allowed to see the content of calendar items unless the mailbox owner has specifically granted access first to the mailbox and then additionally to the folder istelf.
It sounds like what you're asking is for someone to be able to open this person's calendar and see free-busy information based on a day/week/month type view. There's no way to do that without marking all items as Private, which I don't know of a way to do by default.
UserX could view someone's free/busy information through Outlook by creating a new appointment/meeting request in Outlook, adding that person to the invite list and looking on the Scheduling tab on the new item.
Here's an MSExchange.org article that explains how the Free/Busy information is created, stored, and used by clients.
Does that cover it?