First Seen In: Iron Man Vol. 3, Issue #42.
While the SKIN Armor was somewhat divisive among fans when it first appeared, its roots aren't difficult to understand. As Stark's armor became more and more advanced, and his dependence on the artificial intelligence contained within, it was only a matter of time before the suit gained sentience, and instilled the invincible Iron Man with a distrust of even the armor he had crafted himself.
This fear took the brilliant inventor back to the drawing board, crafting a far less impressive set of armor out of over-sized gauntlets, boots, and a chest-piece. Since the Iron Man 3 trailers have shown signs of a sentient suit and paranoid Stark, the films might follow a similar path.
But the SKIN Armor didn't truly reach its heights until the development of Synth-Kinetic Interfacing Nano-fluid (SKIN). The stunningly-malleable SKIN is contained within the armor's chest-piece, spreading over the entirety of the body on command. While flexible when needed, the fluid can also be hardened to near-Adamantium levels of invulnerability, making this armor arguably the strongest Stark has ever constructed.
As if the hulking shoulders and midsection of the armor wasn't enough to prove that this incarnation isn't one to mess with, the SKIN also features a retractable energy blade within the left gauntlet that can be reformed into a shield in a pinch.
In other words, if anyone is worried that the Iron Man movies might go the route of the comics and sport a sentient suit, don't fear: a technophobic Tony simply means oozing liquid armor and an energy sword.