16 tooth seemed perfect to me too!
Although it did nothing to improve my speedometer accuracy, I also found the 16 tooth sprocket to be a big improvement on my '05. I bought a like-new GSXR sprocket on Ebay for $18, which allowed me to keep the rubber cushioning built into the sprocket like the factory original. I was able to keep the same chain, just moved the wheel forward with the adjusters.
I ride 95%+ pavement, and the bike seems totally happy at 75 mph. I'd say this sprocket change was the cheapest and fastest improvement I've made to the Wee so far.