Its seems like Terrence Howard won't be returning for the IRON MAN sequel. In the film he played the character of Jim Rhodes, Tony Stark/Iron Man's best friend and future armor-clad co-hero "War Machine". One scene featured Howard looking at a one of Stark's experimental suits of armor and saying "Next Time".
In his place will be fellow top-shelf black actor Don Cheadle, who has displayed his pwn acting brilliance in such films as CRASH, BOOGIE NIGHTS and the OCEAN films (Gotta love that Cockney accent!) Marvel indicated it had planned on working with Cheadle in the past; however his role in the prospective project ended up going in another direction.
Marvel, however, had zipped lips over the reason for Howard's departure. But a close source indicated said negotiations fell through over financial differences among other reasons. Is it just me or does that final phrase "among other reasons" sound a little too cryptic to me . . . Even by Hollywood's standards. As a master of assumption I'm gonna go with this being yet another case of good, old-fashion "creative differences". I will further elaborate on my theory by stating that Howard had wanted the sequel's script to feature a twist ending where War Machine suddenly turns on Ironman and pummels him into a single, slightly dented tin can (figuratively speaking). He then moves up the ranking to lead hero in the franchise.
Speaking of the sequel script, Justin Theroux (co-writer of the hilarious TROPIC THUNDER, who as an actor played, strangely enough, the film director in David Lynch's MULHOLLAND DRIVE). The supercool Jon Favreau is back to helm. Robert Downey Jr. and Gwyneth Paltrow (as Stark's put-upon assistant/love interest Pepper Potts) are also expected to return.

War Machine.

Sex Machine.
Source:
AintItCool