Project Deus Ex Machina:
The purpose of Project Deus Ex Machina was always, first and foremost, the creation of a cybernetic weapon. Specifically, a top secret and isolated branch of the military wanted a fully capable battle ready robotic body powered and operated by a human brain.
There was early difficulty finding a suitable test subject. Because of the stressors involved it was thought a terminal patient might not survive the transference, and Dr. Ostermeyer personally refused to perform the procedure on any death row inmates who might've volunteered as she considered that dangerous in the long run. Eventually the military group - through what some might consider a gross abuse of federal power and a hair-splitting of contract law - seized Justin Hammer and delivered him to Dr. Ostermeyer.
The subject was sedated, then anesthestized, complete digital scans were taken to help in the construction process and his brain was removed, fitted with microchips and sealed in a protective "artificial wetware" coating. The remaining body was afterwards incinerated as medical waste.
There were three different cybernetic bodies simultaneously being worked on as part of the project. Each had a different purpose: one was designed for heavy combat, one for stealth and infiltration, and the third was the standard body Hammer's brain was usually housed in, when the other two weren't being tested or were in the process of undergoing more work. All three bore a visual appearance outwardly identical to Hammer's human body in every way.
In addition to being temporary containment between tests, the standard body was also the one Dr. Ostermeyer was allowed to work on the most in her own time, and during the seven months the project was running she made as many improvements to it as she was allowed. She was able to add a partial sensation of touch, several automatic functions such as blinking and a startle response, a more realistic tactile gauge of temperature and a mild sense of pleasure or pain, but she was prevented in doing anything to reconstruct senses of taste or smell.
The combat body was built with a more resiliant frame and otherwise more durable materials, ultimately being near-invulnearble to bullets and most any other damage. It was also built to be far stronger physically and had senses of hearing and sight far outside normal human ranges. Though at first human in appearance the right arm could shift into a high-powered energy cannnon, while the left could do likewise but with a more standard military grade submachine gun. Because of the difference in construction and the other features built into it this body had no physical sensation at all, and the synthetic flesh had a much lighter "pasty" complexion owing to the different materials used.
The stealth body was designed to pass for human under close visual scrutiny and by most normal security measures. It contained an interior artifical frame so that if x-rayed would be seen as a human skeleton. It also had onboard temperature regulation so that it would pass for normal under heat vision and body temperature monitors. It was not built for strength or durability the way the combat body was, but it did have a concealed, extendable blade weapon of approximately four feet in length hidden in the right arm. It had very little physical sensation but owing to the need to outwardly mimic humanity it did have several automatic reactions programmed into it, and had a built-in "shudder" that simulated regular breathing.
All three bodies had built-in GPS tracking, but it was never utilized as Hammer never left the facility for the project's duration. The standard body's tracking, in addition, was disabled temporarily by Dr. Ostermeyer during one of her sensory upgrades in order to avoid a system overload, and she conveniently neglected to reactivate it after.
Project Second Life:
After project Deus Ex Machina was deemed a failure by the military, Stark Industries purchased all three prototype bodies and all associated materials produced and hired away Dr. Ostermeyer to continue her research. The project was restarted as its own seperate research division at the Stark Industries scientific R&D center located in California, under the name project Second Life (chosen by Tony Stark more as a reference to Dr. Ostermeyer's long term intentions for her work, though also as a bit of a joke reference to a popular video game).
Work right now is only being actively conducted on the standard, most sensitized body. The stealth body has been completely dismantled and utilized for parts, while the combat body is kept offline in Ostermeyer's private lab, concealed in a cabinet only unlockable by her handprint and encrypted access code.
With the resources available to her and now no other goals to focus on her save her initial ones, in a matter of months Dr. Ostermeyer had added quite a number of features to Hammer's body, both to provide sensation and a more passably normal human outward appearance.
Currently all five senses have been regained in some form. Touch and physical awareness is one of the greatest focuses of overall progress, as it's difficult to simulate the full range of human tactile ability synthetically; at present the entire robotic body can register physical sensation, temperature and to some extent pleasure/pain, though still not on the same level as would be found in a living human.
Both sight and sound exist within average human ranges - Dr. Ostermeyer purposefully limited the senses in this case so as to not go outside normal parameters. However, Hammer no longer requires glasses, though he typically wears a pair with untreated glass regardless to continue with his former appearance.
Smell has been more or less restored successfully although the complications of synthetically processing this information causes Hammer to have occasional synthesia - sometimes registering scents as colors or textures.
After touch, the development of taste has been the greatest difficulty. As of the doctor's latest upgrades there is some ability to taste but nothing registers quite as strongly or in the same manner as it did with a human tongue. Also more "complex" flavors are virtually guranteed to register incorrectly in the breakdown - fruit, vegetables, and anything with a strong correlation to one of the five basic flavors has been proven to translate the best. In addition, not much food can be consumed at a time because there is no actual digestive tract present. Small amounts of matter can be broken down by an internal system and just about any amount of liquid can be filtered and redirected, though obviously alcohol or any other intoxicants have no effect.
In addition to not needing any food the robotic body does not truly sleep; the power supply is strong enough theoretically keep running indefinitely as long as the body regularly shuts down to recharge. Though it could easily keep running for much longer typically Hammer follows a normal "sleep" cycle - shutting down for about eight hours every night. An internal mechanism, set not unlike an alarm, reactivates the body and powers it back on at the appointed time.
There are also several improvements Dr. Ostermeyer made to simulate human life to outside observers and attempt to avoid the "Uncanny Valley" effect. The body has programmed responses mirroring various automatic human functions - blinking, coughing, flinching, and physical "feeling" reactions to certain emotional stimulae (fear, worry, anger, etc). It does however not breathe, sweat or have a pulse, tear ducts, or salivatory glands. The synthetic skin feels not quite like flesh and is consistantly room temperature to the touch.
Though Dr. Ostermeyer tried to limit physical abilities to the normal human range to the best of her capability, there is still slightly enhanced strength as well as virtually unflagging endurance. The mechanics and circuitry of the body typically do not need repair or regular maintenance, though in the course of her work Dr. Ostermeyer performs almost daily analysis and adjustments. The most notable problem is concerned with power flow, as the sheer amount of circuitry involved and the various stimulae it has to process could lead to a short circuit or electrical surge, especially if any damage is incurred - a concern because in the event of an overflow it could fry the attached human brain. So far any malfunctions along this line have been rare and quickly identified.
Though typically any maintenance, repairs or upgrades can be carried out by simply removing or pushing aside the synthetic skin, if necessary any entire limb of the body can be detatched to be worked on seperately. If major work has to be undertaken and there is fear of any damage being done to the brain commonly Dr. Ostermeyer detatches the entire (still conscious) head and sets it aside while she works on the area of interest.
The GPS tracking system installed by the military has been reactivated. Currently the only one who could use it and view the data is Dr. Ostermeyer, who has a special program for it in her Stark Industries edition smartphone. Tony Stark can also access the tracking device, but a mutually agreed upon built-in protocol means that if and when he ever does Dr. Ostermeyer will be informed immediately, again by the program in her smartphone.
The work and various experiments of this project are performed solely by Dr. Ostermeyer, though she shares her designs with her employer through regular progress reports. In addition she has also made the attempt to teach Hammer some of his inner design work, as she is aware she won't be around to fix him forever. She does not however like Hammer to attempt opening or adjusting any parts of his system without her supervision - so far he's come close to accidentally electrocuting himself "out of curiosity" an estimated seven times.
Hammer's technical status is up for something of a debate - the main federal government identifies the human being known as Justin Hammer as dead, but they also recognize the existence of a "an entity identifying itself as 'Justin Hammer' in possession of both sentience and autonomy". From a legal standpoint Hammer is usually considered property rather than an individual, although this can vary with some branches of the government's bureaucracy. (It is largely understood but unspoken that with his influence Tony Stark could attempt to do something to change this, but doesn't intervene knowing that Hammer would more than likely resent the favor.)