When scheduling an appointment with a resource or location on any given
day/moment, the resources and locations tab should not display taken/busy
locations or resources. You can, of course, see if they are taken on the shedule
tab but if the resource or location is taken or busy you have to go back to the
loc. or res. tab and pick an other (and hope this one is free/not taken). iT
would be great if only the non-busy resources or locations show up in a search
for resources or locations. Preferably this feature should have an on and off
switch in the preferences or admin console.

Many day to day users have requested this and this should not be that difficult to implement.

I've made a feature request for this in bugzilla (bug 10347)