I've played with the framebuffer timing calculations a bit - 16 bpp appears to require unreasonably low hsync frequency in order to keep within the available video bandwidth of 32 MHz.For 640x480 that's true. For 320x240, it should work. I definitely used a hicolor mode on ARAnyM when atafb was revived.
Using what atafb option? Or did you use fbset to switch? Cheers, Michael