I think that the standard M-16 .223, which was designed for and introduced in the early 60's for widespread military use has outlived it's usefulness. It was from the start not a weapon that functioned well when it got dirty, cold or wet. They (Colt) made some minor modifications to try to correct some of these short comings.
When I used one in the Army in the early 70's I never was impressed with a weapon that you have to have a seating and separate cocking handle (in the back). It was a pretty accurate rifle for a peep sight though. It wasn't hard to consistently hit targets out to 300+ yards.

I think there are replacement auto/semi-auto weapons that are being developed similar to an Israeli rifle that moves the action back further into the stock, shorting the overall weapon, while retaining approx. the same length barrel.

This makes it easier to move and fire quickly. I can't say whether it's gas operated (less desirable) or inertia (like Benelli's) shotguns (more reliable). But I was impressed by the demonstration on "The Military Channel" in the last 6 months. I have no idea when such a weapon is scheduled to start replacing the M-16. I would imagine that it would be a phased replacement to get full use out of millions of existing M-16 and warehouses full of ammo. Unless the later is the same.