There likely isn't any advantage in terms of resolution, and 1/16 is pretty smooth with most steppers anyway.

Make sure you're using stepper motors with very low inductance if you're having trouble with noise and vibration. Inductance per coil should ideally be under 3uH for a 12V power supply. If your inductance is much more than that, you're probably already having trouble getting the current to rise fast enough in the coil to do 1/16 microsteps. This was a problem with motors that MakerFarm was shipping in early 2014, but I think the later motors are better.