Before answering your question, I'd like to state that it's not very sensible to install Windows 7 on a FAT partition. Much of the progress Windows has made since Windows 2000 and much of the stability it has gained is due to NTFS. It is just a much better file system than FAT32 could ever be, let alone FAT16. By the way, are you sure it actually is FAT16? I can't imagine Windows 7 would want to run on FAT16...
As for you question: yes, Mac OS X can both read from and write to FAT16 and FAT32 partitions. So in a way you don't need NTFS-3G, but I suggest you keep it installed and reformat your Boot Camp drive. All newer Windows versions run much, much better on NTFS.