No, 16 bit is not the same as dx9 mode, though they both fix the color problems. 16 bit is is a res-patch setting and dx9 is a sfall one, it does not work to have both fixes set at once.
I use mode 4 myself (it came first so I've stuck with it), but I think it might be wiser to have the installation default to 16 bit rather than the sfall one, unless some mod needs dx9 for something specific. I think that may cause less problems (not sure at all though as I haven't had any problems myself, but that's just the impression I've gotten).
Edit: A bit slow there
Anyway, just wanted to add that the dx9 dll needed for mode 4 comes with the latest patch/RP, so that's not a problem anymore.
I use mode 4 myself (it came first so I've stuck with it), but I think it might be wiser to have the installation default to 16 bit rather than the sfall one, unless some mod needs dx9 for something specific. I think that may cause less problems (not sure at all though as I haven't had any problems myself, but that's just the impression I've gotten).
Edit: A bit slow there
Anyway, just wanted to add that the dx9 dll needed for mode 4 comes with the latest patch/RP, so that's not a problem anymore.