Ever since the terrorist organization that kidnapped Stark in the first Iron Man was shown to bear the name 'The Ten Rings,' an appearance of the Mandarin has been expected. We've gone into depth on the reasons for and against the Mandarin relying on the magical rings he utilizes in the comic books, with the grounded approach to this facet of the Marvel universe shedding off most sources of mysticism.
We're still going to suspect that the rings are merely a sign of wealth and power (as they usually are), since the Mandarin doesn't even wear them in every shot of the trailer. Most likely included as a nod to fans.
The rumors so far have Mandarin incorporating the same Extremis virus into his own body, granting him strength akin to Stark. But with growing reports claiming the final showdown will involve armies, not a one-on-one fight, we'd bet that the Mandarin's powers will mostly be seen through weaponry, not magic or cybernetic enhancements.