It's hard for me to be sure. MS-DOS could mean either FAT or FAT32. They are both MS-DOS formats.
You are correct in noting that FAT would be more correctly named as FAT16. Also for this upgrade it may not be FAT32.
A 1G card is probably FAT, but it could be FAT32. If you are having trouble the best thing is to reformat as FAT (to be sure), or to use a smaller card, which is unlikely to be FAT32.