The metal core used in the original arc reactor built with Yin Sen was made from the element Palladium. I can't remember what Tony's exact words but he mentions to Yin Sen the weight of the core as he's holding the ring up after pouring it into the top of the missile/core mold thingy. (I've also watched IM 10+ times). All the cores in v3.0 of the Arc Reactor in IM2 had a new style rectangular shaped palladium core that could be removed as it was depleted.
It really caught my attention because at my previous place of employment, we used palladium in some of our semiconductor manufacturing processes. Thought it was cool the movie used a real metal. Anyway.....
In Cap, Howard Stark mentioned the shield was all the Vibranium that existed in the world as he handed Cap the shield (we're just going to use what we know through the Marvel Movie Verse).
I guess we'll probably never know, but how does the Arc reactor use the actual metal? The real element Palladium is a metal & the fictional element Vibranium (according to what we've seen in the new CA movie) is also a metal.
What I'm getting at is the core of the Arc Reactor doesn't have to be some magical, glowing, Asgardian, soul collecting, spiritual, power ball.
It just has to be a piece of metal. Otherwise, how woudl Tony and Anton create it in a cave?
Did anyone else know about Vibranium? Apparently not, because Tony mentioned in the IM2 Donut Scene that he tried every known element to man. Nick Fury told him "you havent tried them all". It's apparent Nick knew of another element in existance. So how did Tony technically "create" a new element when one known to Fury already existed? That's because Tony Stark did not technically "create" a new element.
Tony "created" a new element because it was unknown to the masses. His father/SHIELD/GovtAgency already knew what vibranium was but just kept it secret. They were limited by technology in making any attempts to manufacture/weaponize it. Tony was able to do that 60+ years later.
Besides, if Vibranium was already known to the rest of the world and able to be manufactured, wouldn't Iron Man, or anyone for that matter, already have attempted to use it as armor for any suits/planes/rockets etc? In the Cap movie it's clearly stated it's super light and damn near indestructible.
I think where the confusion is coming from has to do with the Arc Reactor as a whole. There is no question now after seeing CA, the Arc Reactor design used by teh Starks & Vanko is derived from the CosmicCube. The Palladium core was the issue in IM2 (the burned up square cartridges). The new element Tony made was used to replace just the Palladium core, not replace the entire design of the ArcReactor. The small piece of metal is just a small part of the reactor, but a very important one apparently.
Of course, there is a very good chance I'm completely wrong.