Here is the solution.  I spent a day writing this improvement to how DayView handles double booking.  I wish Infragistics would have taken the time to a) write this correctly to begin with, or at least b) test their code or even c) responded to my post.

public class DayViewCreationFilter : IUIElementCreationFilter
{
    public void AfterCreateChildElements(UIElement parent)
    {
        if (parent is DayUIElement)
        {
            foreach (UIElement uie in parent.ChildElements)
            {
                AppointmentUIElement aui = uie as AppointmentUIElement;
                if (aui != null)
                {
                    bool isDoubleBooked = false;
                    foreach (UIElement uieInner in parent.ChildElements)
                    {
                        AppointmentUIElement auieInner = uieInner as AppointmentUIElement;
                        if ((auieInner != null) && (auieInner != aui))
                        {
                            if ((auieInner.Rect.Y == aui.Rect.Y) || // side by side
                                ((auieInner.Rect.Y >= aui.Rect.Y) && (auieInner.Rect.Bottom <= aui.Rect.Bottom)) ||    // inside
                                ((auieInner.Rect.Y <= aui.Rect.Y) && (auieInner.Rect.Bottom >= aui.Rect.Bottom)) ||    // outside
                                ((auieInner.Rect.Y < aui.Rect.Y) && (auieInner.Rect.Bottom > aui.Rect.Y)) ||  // over top
                                ((auieInner.Rect.Y < aui.Rect.Bottom) && (auieInner.Rect.Bottom >= aui.Rect.Bottom)))  // over bottom
                            {
                                isDoubleBooked = true;
                                break;
                            }
                        }
                    }
                    if (!isDoubleBooked)
                    {
                        // look for this appointment's shadow and adjust it too
                        foreach (UIElement shuie in parent.ChildElements)
                        {
                            AppointmentShadowUIElement asui = shuie as AppointmentShadowUIElement;
                            if ((asui != null) && (asui.Rect.X == aui.Rect.X + 5) && (asui.Rect.Y == aui.Rect.Y + 5))
                                asui.Rect = new Rectangle(asui.Rect.X, asui.Rect.Y, parent.Rect.Width - 10, asui.Rect.Height);
                        }
                        aui.Rect = new Rectangle(aui.Rect.X, aui.Rect.Y, parent.Rect.Width - 10, aui.Rect.Height);
                    }
                }
            }
        }
    }
    public bool BeforeCreateChildElements(UIElement parent)
    {
        return false;
    }
}