Continuity mistake: After Tony gets the armor back at the Mandarin's hideout and meets up with Rhodes, they go by boat to the harbor. On the way Tony calls the Vice President - during this scene the VP's phone changes, note the camera on the back of the phone is visible, but in another shot right after, it is a completely flat back panel.
Factual error: When the Iron Patriot armor is shot at on Air Force One, the bullets ricochet and smash a window. The windows on Air Force One are bulletproof.
Continuity mistake: Before Tony sends a holiday greeting to the Mandarin his car is pointed one way when he gets in, then the car faces the other direction.
Continuity mistake: When Tony is giving his address to the Mandarin through the media the reporter in front of him has a cell phone which changes design between shots.
Other mistake: When Tony's house is destroyed by the Mandarin, watch closely when Pepper is blown through the air, just before Tony attaches his suit to her - she's very obviously wearing high-heeled shoes that would make it impossible for her feet/ankles to fit correctly into the suit without them being crunched up by the suit's boots. But later on, when she gets out, if you listen, you can hear the "clicking" of her unbroken heels as she runs around.
Continuity mistake: When Stark gets trapped by the water tank he is completely soaked. When he walks back to the car with the boy he is completely dry and his hair is restyled with not enough time for this to happen.
Character mistake: When Happy is in hospital, two bad things happen: One, when a nurse comes into the room, she injects a drug into his IV line, but she doesn't kink the line above where she is injecting, so the drug goes both down and up the line. Two, Happy's IV line isn't attached to a pump. The nurse manually fiddles with the flow rate of Happy's IV. But the fiddling leads to nowhere, as she doesn't look at the chamber where the drops come out - this is very important, as the IV bag can run out anywhere from 30 mins to 3 hours.
Character mistake: When Harley asks Tony what the light is coming from his chest, Tony responds "an electromagnet." Harley replies "What does it power?" An electromagnet is not a source of power. The arc reactor is the power source which powers both the electromagnet (to keep Tony safe from the shrapnel near his heart) and the Iron Man suit.
Visible crew/equipment: When the President boards Air Force One with the Iron Patriot you can see the reflection of the camera boom and crew in the two black cars in front of the plane moving to the left.
Character mistake: Killian tell Pepper the "primary somatosensory cortex" is the pain center. However, this is a gross exaggeration someone of his knowledge would not say. One, the area handles all tactile (touch) receptions. And two, other areas of the brain handle pain, so there's not a "pain center." However, the area that lights up is also wrong, because only the right side would be stimulated since it was his left arm that was touched.
Factual error: At the end Tony drives an Audi R-8 e-tron, which is an electric car, and while it has a sound system to produce an artificial engine noise, it doesn't sound like what is heard.
Other mistake: Immediately before the helicopter attack on Tony's house, Maya (the "botanist") looks at the TV set, which shows a news chopper shot of the home, and says "Should we be worried about this?" It's only a moment later, when everyone looks at the screen, that a missile track appears on the screen.