A great addition to SharePoint 2010 is the Calendar Overlay functionality, allowing the user to create color-coded events in a calendar based on user-defined event categories, out of the box. Below is a simple walkthrough of the process.
1. Modify the default categories created by the list (Calendar Tab on Ribbon -> List Settings -> Category Column)
2. Add a couple of events, at least one in each category for testing purposes
3. Create a separate view to display each Category (Calendar Tab on Ribbon -> Create View -> Calendar View)
**You will end up with one view for each category**
4. Make one more view that will be the view with all color coded views overlaid (Calendar Tab on Ribbon -> Create View -> Calendar View)
5. Add a new calendar (category view) to the Calendar Color Overlay View (Calendar Tab on Ribbon -> Calendars Overlay) with a Category that is blank **You must do this FROM the Calendar Color Overlay View
6. Name the Calendar, select SharePoint, select a color for the category, and click Resolve to populate the Lists and List Views available in the SharePoint site under Web URL. Select your Calendar and the View you created in Step 3. Select Always Show. **Repeat steps 4 and 5 for each category view**
7. Your Calendar Overlay Settings for the Calendar Color Overlay View will look similar to the screenshot with a Calendar for each category
8. Your resulting calendar view will have the four views overlaid, with a color for each category. A legend is displayed on the left corresponding to each view.