Thanks to user, kedrell on "Super Hero Hype" Forums, He has spotted something I didn't and probably would have ever noticed, featured in The Amazing Iron Man 2 Trailer. Check It Out.
So I guess its safe to say, that they are going with the Ultimates route for the character in The Avengers.
SPOILERS
Nick Fury is first to ask Tony to join the Avengers Initiative, but Tony denies. Since Tony doesn't want to join the Avengers, the government simply asks for the armor. After Tony Stark disagrees to turn his armor over to the Government, they go to their secret defense organization, SHIELD. One of the members of SHIELD happens to be a Russian Spy, and is ordered to go undercover as a new assistant to Tony Stark. Her job is to steal a prototype of the armor, and hand it over to the Government. The Government then hands it over to the U.S Military. Since it is just a prototype, weapons are added to the armor by weapons developer, Justin Hammer. Doing all of this, Rhodey feels that he has betrayed his friend, but it is his job. After Tony finds out that Rhodey has his own armor, first he is upset, but realizes that he wanted Rhodey to be apart of the technology in the first place. he would just have to deal with the fact that the technology is apart of the Government too. In the end, Nick Fury goes back to Tony Stark. The government has beaten Tony Stark, in getting the armor, for War Machine. So Nick once again offers The Avenger initiative.
Wow, that's a lot to deal with. Do think he'll lighten up?