While he intended the armor to be used by James Rhodes, Stark ended up donning it himself to gain revenge against Obadiah Stane. The armor prevailed against the Iron Monger's armor and Stark kept the design for many months.
It was used extensively against other armor users during the first Armor Wars until being destroyed with one of Firepower's powerful heat-seeking missles.
A replica of the armor was later used by Mike O'Brien to face Ultimo. The armor's shoulderpads and camouflage effect were incorporated into the design for the updated Stealth Armor. When Tony Stark undertook Stark Resilient, he dismantled and melted one version of this armor.
This armor is powered by a miniaturized arc reactor, like every previous Iron Man armor. Apparently carrying all the capabilities of the MK VI, the MK VII also has one distinguishing feature that sets it apart: A self-propelled rocket pod form that seeks out the wearer of a matched pair of bracelets, then opens and reforms around the person as a fully functional Iron Man suit. Other notable differences in the Mark VII armor include the following:
Improvement of the hand mounted laser emitters developed for the Mk VI. They appear to draw their power directly from the ark reactor, as they are now able to fire continuously in combat.
The flares and forearm launched missle originally put into the MK III have been re-added. The shoulders of the MK VII are capable of launching mini air-to-air rockets with apparant homing capabilities. The legs of the MK VII now store several missles.
The Mark VII shows additional thrusters both on the back and the front, hidden under plating. This presumably allows the Mark VII to reach greater speeds and frees the hand repulsors to be used more frequently and effectively during combat.
You can download this papercraft template here: Iron Man Mark VII Armor Free Mini Papercraft Download