I thank God that Terrence Howard is no longer Col Rhodey. Don Cheadle is solid, and is an awesome War Machine. Most importantly, he doesn't sound like a 13 year old girl when he says "Tony" (watch the first one again and pay special attention to Terrence's whiney whine.) Don Cheadle brought class and believability to a role that would have been doomed.
The S.H.I.E.L.D. thing is getting a little overbearing. These movies are becoming promos for the Avenger Initiative and it takes away from the plot. I'm not the biggest fan of Sam Jackson as Nick Fury, but I don't hate him either. I keep seeing Snakes on a Plane when I see that bald badass. They mentioned the situation in the Southwest at least twice (referring to the Incredible Hulk for those playing at home...DESPITE the fact that Tony Stark was in the end of the Hulk movie and obviously knows about it already) and showed what I assume will be the new Captain America shield. Vomit. Also, Scarlett Johansson's character was completely unnecessary and was obviously just there for sex appeal, another S.H.I.E.L.D. operative and too many spinny take-downs.
Overall, I'd give the movie a B-. Not utterly fantastic, but not a complete failure.