During the Comic-Con panel in San Diego, director Jon Favreau spoke about the development of the villains in the film and how he hopes they evolve through the proposed film franchise.

"I wanted everything to come out of the technology that Tony Stark developed and watch it grow out from there," said Favreau.  "And then, as you cut the movie together, and you see how it plays, and you learn the personality of the film, then go deeper and deeper."

Two possible villains for Iron Man in next summer's film are Jim Rhodes, played by Terrence Howard and Obadiah Stane (aka Iron Monger) played by Jeff Bridges.  Rhodes, who is a friend of Robert Downey Jr's Tony Stark, will most likely be saved as the villain for a possible sequel.  Jeff Bridges' Obadiah Stane is the more likely choice for an initial villain to Iron Man.

One villain you won't likely encounter in the first film is Iron Man's arch-nemesis, Mandarin.  "The big villain's the Mandarin, but the Mandarin is not the type of villain where, right off the bat, you could watch them squaring off," explained Favreau.  "You can't stay true to the books...without putting off the mainstream audience...As he's depicted in the books, I don't know that that depiction would work nowadays."

He explained further for those fluent in Tolkienese.  "You can't have Sauron be the first person that Frodo meets up with...You have to lay enough down in the storyline so, as the story unfolds, you get there, but you also have to delve into the rogues' gallery and see."