NOTE: This spoiler was sent in by Larry.
The movie begins with a series of army Hummers driving in the middle of a desert in Afghanistan. In the middle Hummer, the soldiers look nervous & in awe of an unseen passenger, who the camera pans in to show Tony Stark, (Robert Downey Jr.) Stark asks them to be at ease & starts flirting with the driver, talking about his latest female "conquests", (technically going "12 for 12" with all the Playmates of the Year - though Miss May had a conflict in her schedule but Miss December were twins). One of the soldiers asks Stark for a picture with him, which he agrees to, though jokes that he doesn't want to see this on "Myspace" and not to give the peace sign, which he admits he's kidding of course. As he's posing, their Hummer gets rocked by an explosion of the Hummer driving in front of them. The soldiers get out & warn Stark to stay inside. However, each soldier gets shot by unseen soldiers leaving Stark all by himself. He gets out of the Hummer & tries running away. As he hides behind a rock, he takes out his phone & tries to contact someone. All of a sudden, a missile, (with "Stark Industries" written on it), lands right next to him. He tries to run but gets knocked out by the explosion. The next scene is a montage of an unconscious Stark getting carried away, a crude surgery in a darkened cave with him screaming in pain and finally of him sitting with a mask/bag over his face. The mask is unveiled to show him sitting in front of a camera with terrorists all around him and a gun pointed to his head...
IRON MAN title appears.
The movie cuts to...
36 hours earlier.
There you see a typical day in the life of Tony Stark. He's driving his fancy car extremely fast, going to wild parties, and generally having a fun time with everyone around him. He's to be presented an award at Caesar's Palace where on the screen at the ceremony, begins a montage of Stark's life & career. How at age 4, he designed his first motherboard, and at age 17, graduated summa cum laude from M.I.T, basically, promoting him as a child prodigy and genius. They also focus on his parents and his co-partner, Obediah Stain, (Jeff Bridges). As Lt. Col. James Rhodes, (Terrence Howard), presents the award, Stark is nowhere to be found. Obediah accepts the award for Stark & explains that Tony's doing some important business. The next scene shows Stark actually gambling at the casino at Caesar's Palace, (and winning with a huge crowd behind him, mainly girls). Rhodes "presents" the award to Stark at the gambling table, (and also knocks the dice out of Tony's hand, causing him to "crap out". Stark jokes with Rhodes & gives the award to an actor dressed as "Caesar" in the casino as he walking out. As he's about to leave & get in his car, a reporter comes up from behind to ask him some questions. Stark's bodyguards tell him, (he has his back towards her), that she's cute, so he turns around & starts to answer her. He keenly notes her high education & background as he also defends his company & reputation as an arms dealer focusing on peace rather than war during her line of questioning. Stark then flirts with her & invites her back to his place, which she surprisingly agrees to where they passionately make out, (the scene is played for humor than romance as initially she's clearly turned off by Stark's advances during the "interview"). The next morning Stark is gone & the reporter meets up with "Pepper" Potts, (Gwyneth Paltrow), who has her clothes pressed and a car waiting to taker her anywhere she wants. The reporter makes a snide comment to her about her "job", though Potts strikes right back about "taking out the trash", when Tony's done with something.
The next scene is Stark driving to his private jet going to Afghanistan where he tells Rhodes to lighten up & drink. Rhodes refuses though seconds later, we see Rhodes & Stark drunk while the stewardesses are dancing around them like go-go girls. As they land, Stark has a presentation of his Jericho Missiles, which use repulsor technology to split up and turn into many little missiles which seem to be capable of taking down an entire mountain in the background during the demonstration. Stark then opens up a control panel, which is actually nothing more than compartments for drinks & glasses. He then jokes around with the soldiers and we then see them driving around in the Hummers at the beginning of the movie. All this turns out to be flashbacks in Tony's mind as he's waking up from the explosions that knocked him out initially at the beginning of the movie...
Stark awakens to the scene where he's held at gunpoint as terrorists bark their demands in front of a camera. He's then thrown into a prison/cave where he meets up with Yinsen, (Shaun Toub), another prisoner. Stark as he's getting up, feels his chest & notices a small metal circle attached to his chest, which is attached to a car battery. Yinsen says he did that surgery to save his life; however, the scrapnel from the explosion is embedded in his chest & will reach his heart within a week, rupture the arteries & kill him. The metal circle was just a temporary reprieve. The terrorists soon enter and demand he build the Jericho missiles just like the ones his company produces. He initially refuses and is subsequently tortured & beaten by them. Raza (Faran Tahir), the terrorist leader, repeats his demands, which Stark then reluctantly agrees to. First, Stark uses his scientific and mechanical background/knowledge to make a self sustaining replusor for his chest which will last "50 lifetimes" and keep the scrapnel from reaching his heart. He then makes designs with Yinsen, which initially appear as a missile, but when folded flat & together, turn out to be an iron suit. We see scenes of Stark welding, melting and fusing metal & wires together to create the suit, as the terrorists watching from surveillance cameras fail to see what he's actually creating. After a week, Raza storms in & demands to know what is taking so long to create the missile & starts to torture Yinsen. Stark pleads with him not to & says it will be completed tomorrow. The terrorists leave but Stark knows he's on borrowed time. He works through the night making the final touches on his makeshift suit, the last part being the mask. The next morning, as he's hooking the suit up to Yinsen's laptop, to download all the information to power up & activate the suit, we hear the terrorists approaching. Stark has a bomb set up by the door so when the terrorists try to open it, the explosion blows them up. Yinsen knows Stark needs more time to finish the download as the whole base was awakened by the explosion & will soon come to finish them off. Yinsen takes 1 of the fallen terrorist's guns & starts shooting around so Stark has more time to get into & power up the suit. The download finally completes...
The terrorists slowly approach the cave/lab where Stark & Yinsen were working. Suddenly, "Iron Man", (Stark), in a big, bulky, grey makeshift iron suit appears & starts repelling the terrorists bullets and shooting some of his own at them. Stark fights his way through the cave to the entrance where he sees Yinsen apparently gunned down & Raza holding a gun to him. Stark shoots one of his missiles at Raza, which narrowly misses but hits the inside of the cave, causing the rubble to collapse around him, seemingly killing him. Stark rushes to Yinsen who in his dying words, tells him not to waste his life. After Yinsen dies, Stark goes around the base in his suit, using flamethrowers to burn/blow up the terrorists, artillery, machines and missiles around the base. After all the terrorists are defeated, Stark using rocket technology in his boots, shoots himself up in the air to "fly". However, he's only able to "jump" a great distance & crashes in the middle of the desert, destroying the suit upon his crash landing. Stark leaves the suit, (in pieces), behind (important) and wanders through the desert, where he's found by Rhodes leading a massive sweep of the desert & following the trail of explosions Stark/Iron Man, left behind.
An injured Stark flies home where he's met by Obediah & Pepper who are overjoyed to see him. Stark demands not to be put in a hospital but to 1. get an American cheeseburger, (Burger King by the way), and 2. to hold an immediate press conference. At the press conference, Stark actually sits in front of the podium, (as the press all now have to sit "indian style" to see & hear him). He immediately announces that Stark Industries will immediately cease & desist from making any more weapons & his arms manufacturing facilities will shut down immediately. The press is in uproar over this & Obediah tries to calm the situation down to no avail. Stark & Obediah drive to Starks home base, which is powered by a huge repulsor, where Obediah explains to him the serious consequences of not manufacturing any more arms, (stock price drop, etc.) Stark wants to hear nothing of it & proposes to focus around the repulsor technology which powers the building and can be used in many different applications. Obediah says that's a dead end & asks Tony to take some time off to rest. Stark agrees, though instead of resting, over the next few weeks, he actually starts working on improving the suit and technology that saved his life in Afghanistan.
The next few scenes show Stark using his computer technology and engineering to modify his designs to the original Iron Man suit. One day, Pepper comes by & she sees Stark on a vertical operating table. He asks her for his help to detach his original repulsor on his chest with a new one he designed, as 1. she's the only one he feels comfortable trusting & 2. only her arms are slender enough to reach in & do it. She reluctantly agrees though there is a close call where she accidentally disconnects something causing Stark to go into cardiac arrest, (played for laughs than for seriousness). She then attaches the newer repulsor & Stark is fine. Potts asks Stark what to do with the original one & he tells her to destroy it. However, she doesn't have the heart to destroy something that saved Stark's life so she encases it in glass & gives it to Tony as a gift & "reminder" he still has a heart, (important).
Stark makes repeated & video recorded attempts to improve his suit, usually with comical results, (his first attempt to fly using only 10% power in his boots results in him shooting up & backwards landing with a thud ala Wile E. Coyote). However, within days, he's able to learn how to control the suit and practice his flying and other abilities. As the suit finally gets basically complete, he tries a test run by flying out of his house around in the Iron Man suit, (all gray in color). All seems to work fine until he tries to test how high he can go into space. As he reaches about 84,000', the suit starts to freeze up & power off (important). As he's falling to earth, he finally regains power & control & flies back just before hitting the ground. He flies back to his house and tries to make a soft landing on his roof. However, he just ends up crashing through it, 2 floors of his house and then lands on one of his cars, destroying it.
After making a few more modifications to perfect the suit, (and learning how to use the repulsor technology to shoot beams out his hands, instead of just as a stabilizer to help him fly, he has his computers start to create the finished model. See as how it's all grey & drab, Stark looks at a car in his garage with red & yellow flames as a design & has that designed into the suit for color.
Stark is reminded about a charity dance that he is supposed to be hosting, (but is not expected to attend as the world thinks he's still recovering from his ordeal & kidnapping in Afghanistan). Stark decides to go anyway where he meets up with Pepper,(& starts finding attractive with a dress she's wearing as a birthday present Stark "bought" her, (he never paid much attention to her before & would just repeatedly tell her to buy what she wanted for any upcoming events like birthdays). He begins to dance with her, despite her objections knowing his reputation as a playboy, though she starts to admit an attraction to him. He then suddenly abruptly cuts her off to cool off the attraction & leaves to get her a drink). On the way, he meets up with Obadiah who is surprised to see him there. As Stark says he wants to get back to running the company, Obadiah admits that HE took Stark off the Board of Directors & continued to run Stark Industries as a weapons manufacturer. He was also making under the table deals selling weapons to terrorists for maximum profits. Angered by this betrayal, Stark leaves the benefit.
The next scene is Obadiah's car driving in the desert in Afghanistan where he meets up with Raza, the terrorist from the beginning of the film. Raza tells Obadiah to leave his guards behind & talk with him in private. During this scene, Obadiah finds the remains of Stark's original Iron Man suit built up in the cave where Stark was held captive. This was the suit that was found in pieces in the desert during Tony's initial escape. Obadiah admits that he initially wanted Stark dead so he could control the company & was upset at Raza allowing him to escape. Obadiah then reaches in his pocket & actuvates a device that causes temporary paralysis to Raza & tells him that the paralysis would be the least of his problems now. As Obadiah leaves, we see his guards holding Raza's guards at gunpoint & orders them to shoot all of them dead, (it happens offscreen).
Stark at home is watching tv & sees a news report on refugees in Afghanistan being beaten & tortured by terrorists. The terrorists are using the same weapons Stark's company was manufacturing. Stark rises up as the news report emphasizes the hopelessness of the situation and starts to get into & activate the finished suit. The next scene is in Afghanistan where we see the terrorists butchering & beating refugees in the area. As one group tears away a father from his family, they are given orders to shoot & kill the man in front of his family for refusing to be separated. At the last second, Iron Man appears & begins obliterating the terrorists. His repulsor rays shoot back & destroy anything in his path. There's a cool scene where 4 terrorists hold refugees at gunpoint & Iron Man's mask pinpoints each terrorist's head & has his weapons shoot all of them dead instantaneously, leaving only the refugees standing. As Iron Man flies away, he's hit by a tank missile & falls. He gets up, turns to the tank, raises his arm, shoots one of his missiles at it & slowly walks away as it explodes. There are more scenes of him destroying all of the Stark missiles & arms that the terrorists were using.
The US Air Force stationed in Afghanistan is monitoring all of this & sends out 2 jets to see what is going on. They find Iron Man flying around &, not knowing he's not a threat, lock in on him. He evades one missile and uses his repulsor technology to destroy another, but the force of the explosion knocks him into 1 of the jets tearing off the wing. The pilot ejects but his parachute doesn't open. Iron Man realizes that Lt. Col. Rhodes is in charge of that area so he calls him through his mask & explains to him what his happening & to not fire at him. Iron Man goes after the falling pilot & gets the chute to open. causing the Air Force to realize he's not a threat. When Rhodes asks Stark/Iron Man how to explain a $93 million jet getting destroyed, Stark tells him to just call it a training exercise & to just cover it up, which Rhodes says is crazy, (but ends up just doing that in the very next scene).
Obadiah meanwhile is trying to take the Iron Man suit technology from Afghanistan & turn it into a series of battle suits. He has everything he needs except Stark's repulsor technology, which is used to power the suit. He yells at his engineers & scientists who try to explain to him that the technology for this just does not exist. Obadiah tells them that Stark built the device in a week in a cave! He then realizes that he has to get Stark's repulsor in his chest to make his Iron Monger suits to work.
As Iron Man returns home, he asks Pepper to find out what is going on with his company & gives her something to break into & find Obadiah's files on his office computer. Pepper takes the device, goes into Obadiah's computer, plugs it in and finds a ghost file showing Obdiah's involvement in under the table weapons deals with terrorists, the plans for the Iron Monger suit and his involvement behind the hit on Stark. Just as she's finishing the download, Obadiah walks into his office & "catches" her, though he doesn't realize she's hacking into his computer. The download completes & she palms the device in her hand under a newspaper on Obadiah's desk. Suspicious, he asks her for the paper & she gives it to him, palming the device in her hand. As she leaves, Obadiah goes to his desk & turns on the computer. However, he sees the "100% downloaded" message & realizes Pepper broke into his files. As Pepper is leaving, she sees an agent from Strategic Hazard Intervention, Espionage Logistics Directorate, who as a running gag throughout the movie, would try to meet with either Starks or Potts to debrief them, only to be put off. This time, she accepts his offer & runs off with him.
Stark is sitting at home getting all the information from Pepper when he's suddenly paralyzed. Obadiah has broken into his home & used the same device he used on Raza back in Afghanistan. Obadiah explains the entire plot, from the hit on Stark to his plan to use the repulsor technology for his Iron Monger suit. He then opens Stark's chest & removes the repulsor keeping him alive from it. As he leaves Stark to die, he tells him that he's going to kill Pepper too and heads out.
Stark stumbles downstairs to his lab where he sees the original repulsor that Pepper kept under glass for him. He tries to grab it but weakened, he just misses grabbing it & slumps to the floor. However, his robots that have been helping him design the suit realize what he was trying to do & grab the repulsor for him. Stark breaks the glass & puts it in his chest.
Potts & the agents arrive at Obadiah's office at the main headquarters, (where the large repulsor is that powers the building), to arrest him. Obadiah hears them enter & quickly puts in the chest repulsor & gets into the suit. As everyone's looking for him, Obadiah, (in the Iron Monger suit), quickly dispatches & kills most of the agents & starts running after Pepper. Iron Man soon arrives & the fight is on!
Iron Man's suit is only on limited power due to the older repulsor being used in the suit. This makes it easier for the iron Monger to smash & throw around Iron Man. The Iron Monger picks up a car with a family in it & throws it at Iron Man, who struggles to keep it from crashing to the ground. To make matters worse, as he puts it down, the panicked family floors it, dragging iron Man through the streets & then running over him. Iron Monger continues to beat Iron Man up, with Obadiah inside taunting Stark. With his suit losing power, Iron Man gets away & starts flying up into space with iron Monger close behind. Just as Iron Monger catches him, Stark says, "How'd you handle the ice problem?" Just then, the ice buildup on Iron Monger's suit causes it to power off & crash below to the ground. Iron Man's suit has also used up its last bit of powers though & crashes on top of Stark's headquarters. However, Iron Monger, is still around, though badly damaged. His shots start destroying Iron Man's suit & tear off his mask. Stark's arm gauntlets have been ripped off as well so he's unable to fight back. Iron Monger tries to fire missiles at Iron Man but the guidance system was damaged & he can't get a clear shot. As a last resort, Iron Man asks Pepper to overload the repulsor powering the building & short circuit out. Though Pepper pleads that Stark would die, she obey's Tony's orders. Just as Iron Monger has a clear shot at Iron Man, the repulsor overloads & short circuits out, causing lightning bolts to ravage Iron Monger's suit & electrocute Obadiah inside as he falls to his death. Stark also absorbs some of the shocks & falls to the ground with the camera focusing on his chest repulsor flickering on & off like a heartbeat as we fade to black...
The last scene is another press conference where Stark is still alive, (of course) & Rhodes is debriefing him on how to explain everything that happened. The plan is to have Stark announce that Iron Man is his personal bodyguard, there was a malfunction with the repulsor powering the building and Obadiah is on "vacation" where several "air disasters" are known to strike. Pepper & the agent from Strategic Hazard Intervention, Espionage Logistics Directorate is also there, (who agrees to just call his agency "SHIELD"). Stark agrees to join SHIELD & help them. Stark thanks Pepper for her help & as he leans in to kiss her, she reminds him how he left her at the benefit as she was about to kiss him. He agrees to keep it platonic & goes to the press conference. He begins to read the cue cards that were provided to him by Rhodes but doesn't want to lie anymore. Though he said he won't be taking any questions, the reporter from the beginning of the movie asks him if the press really expects to believe there's a metal bodyguard to conveniently come in & save the day. Stark looks at her & says, "The truth is....I am Iron Man!" The press goes into another uproar as the movie ends with Black Sabbath's "Iron Man" playing.