4 GB FAT16 is actually non-standard, but AFAIK no one has ever reported problems with it on these cameras.
I have only used FAT16 4G SD (not SDHC) cards on my CHDK camera, and it is true that I have never found one error, not one photo, nor one byte ever lost. Plus the increased write speed from the FAT16 format really helps with burst rates as cards get more filled-up. However, I have a Toshiba laptop with a built-in SD/HC, Memory-Stick, MMC, xD, card-reader. Try as I might I can't get it to read FAT16 formatted SD cards. Nor, oddly enough, will it read micro-SD cards in any standard SD adapter whether they are formatted in FAT16 or FAT32. (That is infuriating, I use micro-SD cards a lot for many other device as well.) Oddly again though, that built-in Toshiba card-reader
will read and write to micro-SD cards just fine when inserted into a Memory-Stick adapter first as the go-between interface.
So, while it's true that you won't have any problems with FAT16
IN the camera, getting something else to read it, on rare occasions with particular equipment, might prove problematic. Conversely, I also have a very inexpensive USB multi-card reader. It reads them all in any format just fine, as well as the micro-SD cards of any format. So there will always be quick and inexpensive ways around this if one odd-ball reader-device does not work. (If anyone is curious, the built-in card-reader in that Toshiba laptop has driver software written for it by Texas Instruments. A card-reader brand-name to probably avoid if looking for more thorough compatibility. Outside of this one little bottleneck, the Toshiba is a very nice laptop. They just went with the wrong company for their card-reader is all. A minor annoyance with easy work-arounds.)
Just one data-point to consider about FAT16 cards and any possible problems.
