I'd recommend going higher. Windows 7 easily takes about 15GB, and can grow bigger as you install updates etc. My Windows folder (Win7 Pro 64bit) is currently 18GB.
Also, even if the windows directory itself fit on a 16gb drive, the install needs space for your Users folder too. That stores your user profiles. The user profile contains my documents, etc., which can be transferred to another drive. It also contains an AppData folder which many programs use to store stuff in, and this CAN'T be moved to another drive (some websites do have tricks to let you do this, but microsoft documentation points out that this may break windows update).
My appdata folder is 3GB.
So, I would recommend a minimum 30GB drive for Windows 7.