In the forthcoming ‘Iron Man 2’ - a sequel to the superhero saga - Don Cheadle will replace Terrence Howard as Robert Downey Jr’s best friend. Terrence Howard, who played Col. James Rhodes in Iron Man, the Marvel Studios summer smash, has decided not to reprise the role for the sequel.

Though Marvel refused to comment, sources close to the deal said negotiations with Howard fell through over “financial differences, among other reasons.” Marvel then decided to make a few changes in the role to suit Cheadle, and approached the actor, who is shooting Antoine Fuqua’s “Brooklyn’s Finest” with Richard Gere and Ethan Hawke.

Cheadle most recently starred in “Traitor,” a thriller on which he was also a producer. He will soon be seen in DreamWorks’ “Hotel for Dogs.”

Justin Theroux will be writing the screenplay of ‘Iron Man 2’, and the character of Rhodes is expected to play a larger part in the sequel, which is rumored to go beyond high-tech villains.

As for the others, Jon Favreau will return as the director, and Downey is once again expected to play the billionaire industrialist, Tony Stark/Iron Man. Gwyneth Paltrow will also be back as Pepper Potts, Stark’s assistant.

Fans who loved Howard as Rhodes in Iron Man, will certainly remember one particular scene towards the end when Rhodes looks at the Mark II silver armor in Tony Stark’s lab and mutters “next time.” Those eager to see Howard’s version of War Machine “next time” will be disappointed, to say the least!

Interestingly, Howard had made a revealing statement, back in May, regarding War Machine when he said: “I don’t want to introduce War Machine too early for my own monetary benefits.”

‘Iron Man 2’, which is currently in its pre-production stage, is scheduled for release on May 7, 2010.