Here you go, if that doesn't settle the CGI vs mechanical question, I don't know what will. :-)
Ok, it doesn't answer whether the image that came out this week is CG or not, but it does show that the proportions match and that someone can fit inside. I'm really shocked by this, gotta tell ya... I thought there might be some token use of the mechanical armor but that it would probably be 95% CGI in the movie. That might still be the case, but I'm really impressed with the mechanical version.
I'm finding it difficult to cover some of the Iron Man movie news that's come out this week because I don't want to read any serious spoilers related to the story. So when I learned of the spy videocam footage of the actual, mechanical Stan Winston-designed Iron Man armor in action I hesitated. Fortunately there's nothing really given away in the video but I believe there is some spoiler-ish info on the lead-in page here (which I did not read). There are also some images of the armor, although they're understandably a bit fuzzy. The IESB site is getting pretty swamped, so I don't know if you'll be able to see the video right away.
Thanks to Heath for alerting me to this!