There isn't an official confirmation yet, but it's been reported that Marvel Studios and Jon Favreau have finally reached a deal for him to helm the sequel following their financial dispute.
The only two words that come to mind after finding out about this are "thank" and "God". If we had lost Favreau, who knows who we would've ended up with. The studios probably would've been quick to hire some hack director in order to meet that 2010 deadline (which is already cutting things close as it is).
Furthermore, if history has proven anything with Spider-Man 2 and X2, it's that directors are much more capable of knocking the pants off fans with the sequel, since it means they've gotten past the obligatory origin story. Hell, even Fantastic Four: Rise of the Silver Surfer was better than the first film to a degree. Let's see if this trend continues in the upcoming weeks with Hellboy II: The Golden Army and The Dark Knight.
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