I thought it was very good.
It was a continuation and growth from the first movie. It expanded on the threads from the first movie and added more showing how complex the life of a guy who is a public CEO/billionaire/superhero and how not even Tony Stark can handle it all. What would the government do? What would his enemies do? A lot of stuff gets thrown out there in the beginning but to me it all comes together by the end of the movie.
You have more Tony and Pepper. More Tony and Rhodey. More Nick Fury. Even more Happy Hogan. Better action sequences and better villains (Justin Hammer as opposed to Obidiah Stane) all while maintaining the humor and fun of the first movie.
Personally, I enjoy Robert Downey Jr.'s portrayal of Tony Stark a great deal so I'm able to enjoy the movie when he is just being Tony Stark as much as when there are guys in armor beating the crap out of each other.