Watcom C++ can create programs for DOS, 32-Bit DOS, 16/32-Bit Windows, Netware, and OS/2...quite the well rounded compiler, IMHO! I'm not sure if their IDE will run under 16-bit, DOS, however. You can still use the DOS command line compiler.
For pure 16-Bit DOS with a great IDE...well, Turbo C++ was and is the best!
The free Borland 5.5 compiler can create DOS programs, but lacks the IDE.
One possible solution: use the free Borland compiler, and find a free editor that can launch the compiler and act as an IDE...I know their are several out there, including one made with the old D-Flat libarary.
For a ton of tools, compilers, and source-code, check out http://www.programmersheaven.com/
A quick look through the development tools are found Pacific C (http://www.htsoft.com/products/pacific/index.html
), a free DOS-based compiler w/IDE. However, it is pure C, not C++.
Hope that helps! I'll let you know if I find any other free C/C++ compilers w/IDE's that run under DOS...
Soon to be proud user of Mandrake 10 (again!). SuSE 9 sucks!