Howard, who played Col. Rhodes in the first film and is speculated to become War Machine in the sequel, an Iron Man-like character that comes about as Tony Stark lapses into alcoholism. Of course that is just rumor, but the Military.com article does say that production on the sequel is set to begin in March of 2009.
Even though contracts have apparently not been signed for the film's major principals Favreau, Downey Jr., Howard and Gwyneth Paltrow are all expected to return for the sequel.
Of course, if you haven't yet had your fill of Tony Stark you will get to see him in a brief cameo in this weekend's The Incredible Hulk, a cameo that was recently spoiled by this TV spot should you be so inclined as to see it HERE.