The Crimson Dynamo!
[UPDATE: OK, maybe Rourke is NOT the Crimson Dynamo after all.]
According to Variety, Mickey Rourke is in talks to play the Russian bad guy in Iron Man 2.
Also being considered is the very cool Sam Rockwell as a secondary villain in the film.
"Rourke is in discussions to play a villain described as Tony Stark's Russian alter ego, a heavily tattooed bruiser who is in the arms trade and battles Iron Man in his own nuclear-powered armored suit."
So there you go. As far as I know this is the first confirmation of who the villain will be in the Jon Favreau-helmed sequel. The article says "speculation is that villain is likely comicbook nemesis Crimson Dynamo" but anyone familiar with the comic knows that's who it is from the description above.
I don't know what "secondary villain" might be played by Rockwell, but I can tell you that the phrase "secondary villain" scares me. I prefer ONE villain per movie. Two is one too many. Sam Rockwell is slated to play Justin Hammer, corporate nemesis of Tony Stark. I'll take him as a secondary villain in the film as he is instrumental in the downfall of Tony in the comics which led him into deep alcoholism and losing everything he had.
Good news all around (if it sticks).