Weaving was a popular choice for the role, alongside other contenders such as Christoph Waltz and Mads Mikkelsen. First coming to the attention of audiences with his starring roles in celebrated Australian films Proof and The Adventures of Priscilla, Queen of the Desert, he shot to stardom in his scene-stealing role of Mr. Smith in The Matrix and its two sequels. He built upon that break with starring roles in The Lord of the Rings Trilogy and V for Vendetta. He and Johnston had previously worked together on The Wolfman.
The Red Skull is Captain America's arch-enemy, being among the first villains the hero ever fought when he was first created in 1941. In the comics, he is Johann Schmidt, an unremarkable young man raised in Germany in the 1930s and plucked from obscurity by Adolf Hitler himself. Hitler trains him to be the ultimate Nazi symbol of fearsome propaganda, giving Schmidt the codename The Red Skull and a gruesome red skull-like mask to wear. It is newsreel footage of the Skull rampaging across Europe that inspires frail Steve Rogers to enlist in the Army. And it is his power as a propaganda tool that convinces the U.S. government to create their own symbol through the Super-Soldier project. This results in Rogers being chosen for Project: Rebirth and eventually becoming Captain America. Like Rogers, the Skull survives WWII through a process of suspended animation and has returned to plague Captain America in the present-day, though his actual face has now come to resemble the mask he once wore.
This is pretty damn cool news, as far as I'm concerned. Weaving can play a pretty menacing bad guy, and you're going to need someone with a pretty solid presence to act through whatever make-up they're going to put on him. I think you probably couldn't have asked for a better choice, really. Weaving joins a cast that includes Chris Evans as Steve Rogers and Hayley Atwell as Peggy Carter. The screenplay is written by Christopher Markus & Stephen McFeely (with a possible polish by Joss Whedon).