If you want to test it first, I recommend doing a zero-wipe format in Disk Utility, then reformatting it in your camera. If your card is iffy, the zero-wipe will throw an error. And then you throw the card out.
-- Meteor Tower Films
We make music videos, design video for live theater, and build interesting contraptions.
FAT16 is not usable for your camera, but you can try to format the card with your computer and then try it again with your camera. If the camera recognizes the card, re-format it with the low-level-format option. If not... well... the card my be damaged and you can throw it away