I am astounded at what a perfect bit of casting this is. Anyone that has a passing familiarity with the respective backgrounds of the actor and the comic book character he would be portraying will see the obvious parallels in their personal battles (Downey, Jr. with drugs, Stark with alcohol). If the movie poster doesn't say "Robert Downey, Jr. IS... Iron Man," then someone in marketing is drinking on the job.
What's really encouraging about the news is that it represents such a brave choice on the parts of both Favreau and Marvel. I doubt that Downey, Jr. is on anyone's shortlist of ideal action heroes, meaning there's going to be a lot of bitching and moaning from ignorant fanboys. And of course, Downey, Jr.'s drug problems have complicated productions in the past (he had to be written out of the Ally McBeal series, for example), so I'm sure there are people who consider it risky to place him at the center of a superhero movie franchise.
I see this as a strong indication of Marvel Studios' commitment to adapting their own properties into quality films. Not only is Robert Downey, Jr. a name actor, but he is also an extremely talented one, as evidenced by his Golden Globe award and his Oscar and Emmy nominations. Having him as the star would lend a lot of credibility to a rather obscure comic book adaptation.
Here's hoping that on Friday someone attached to the Iron Movie confirms rather than denies Downey, Jr.'s casting.
Update: Sweet! Jon Favreau has already confirmed the announcement on the MySpace Iron Man Movie Group...
It is true. Robert Downey Jr. is Tony Stark. I am about as excited as I can be. I saw what he can do and he is extremely enthusiastic about playing Stark. I can say with absolute certainty that there is no better choice. The humor and emotional dimension he brings truly raises the bar on this project. Get ready.