Honestly it's a great movie. It kept me entertained and was paced fairly well (with the exception of the beginning) but definitely falls short of the first movie.
I did enjoy seeing more of the man than the suit as it made the moments of Iron Man awesome!
Here's what worked for me:
1. The final boss wasn't another suit of armor
2. The writing of all the characters seemed to work well - I will be honest, Cheadle is a much better fit as Rhodes than Howard. The fire breathing response is what did it for me
3. The use of Pepper - She wasn't just a pretty face to look at this go
4. Tony always seemed to be outmatched and had to figure it out. It makes the audience think that he could actually lose
5. More than a suit of armor - I felt that much more care went into the character developing arc of Tony. I wasn't always looking for the next CG Porn extravaganza
6. The logic of Killian- That was a pretty good idea. They had to add the line about plastic surgery for the Mandarin cause we all know that facial recognition software would have snagged him off of his Facebook page.
7. The Post Avengers Treatment - It wasn't over bearing and it was a nice touch to connect the movies together
Here's what I hated:
1. Lack of AC/DC - Nuff said
2. War Machine/ Iron Patriot didn't do anything! - While Rhodes himself was fun to see on screen, the IP was a worthless redesign. He was basically Wedge Antilles in ANH
3. The use of Pepper - While I liked the first scene when she saved Tony, I don't think that she should have finished off the main baddie. I think she should have somehow weakened him, then Tony calls on the MK42 and levels him. The main hero gets to use what he's created to destroy his nemesis. It would have completed a much cleaner circle. I know it's a thematic element to having her no longer being protected by Tony, but it cheapened it (for me).
Definitely worth seeing. My ranking is 1,3,2