How do you successfully follow up The Avenger's? That's is:
A) An obvious question Marvel Studious asked themselves
B) An obvious opening to this review
C) Scale back
D) All of the above
D is the answer.
Marvel did what they do best by brining in the right people and changing the formula a bit from the previous films. This feels like a different Iron Man film than the others because it tries to bring certain elements full circle, even though the end of the era isn't until Avengers 2 (at least). Downey's role mostly remains the same (in quantity and quality), but Paltrow, Favreau, and Cheadle are all given a chance to do more than just act as "Stark's foil" this time.
The plot of the film is based on The Extremist storyline and the villains are The Mandarin and Aldrich Killian. These men are terrorist, who just want to reek havoc on Tony and the world. To beef themselves up, Extremist is used to give Killian an edge against Tony's suits. This is one of the best parts of the film, as this movie has the best fight scenes of the stand-alone Iron Man films, people are actually able to physically threaten Tony, whether he has the suit or not.
Balancing out the action is a heavy dose of comedy, and some nice drama. Since this film is directed by Shane Black (who directed Downey in Kiss Kiss, Bang Bang), the banter, comebacks, and general a-holeness of Tony Stark is better than ever. Luckily, it's consistently funny, but not constantly present.
A major focus is put on what happens to Tony after The Avengers. He's on put on edge after the experience and worries about the safety of himself, Pepper, and Rhodey. The scenes come through at a moment's notice, and to his credit Downey transitions between everything thrown at him seamlessly. In doesn't matter if someone's wearing a super-suit and in the middle of a fight, or just relaxing on a couch because everything fits together perfectly in this film, and I'm probably going to look back and call it the best film of the summer.