Yup, 16.000 means 16Mhz crystal. It is far more accurate than the AVR's internal oscillator which can drift with temperature and more accurate than a resonator.
I am little surprised as to why the 'lite' version has a crystal !
One more thing to know.
The internal oscillator of the ATmega328 (or the megas) can only go up to 8mhz guaranteed. anything beyond that is not. You can however push that internal frequency by a register setting(but it would not be guaranteed).
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