The G36 is a superior military weapon to the M16, thanks in part to its use of the AR-18 Stoner gas operating system. Keep in mind though, that this is designed as a short range (300 meters and less) assault rifle. The big selling point of this rifle to the German Army was it's ability to withstand torturouse field conditions and still operate, much like an AK-47. Thus, the tolerances on these guns have to be low to ensure maximum reliability, which results in low accuracy as a by-product.
NODDAH is right though in criticizing their hype about this alledgedly "revolutionary" rifle. Eventhough it uses polymers, there is one particular rifle that did a long time ago: Steyr Aug. It is also a lot more accurate than the G36, which I know from people who own the gun.
I'm sure if HK wanted to, they could tighten the tolerances of the G36 to get 1-MOA accuracy like you can get with a match grade AR-15. The SL-8 target rifle (the US civilian version of the G36) is supposed to do this, but it only achieves 1-1.5 MOA. Some more fine tuning is probably needed. A stainless steel bull barrel would probably help out a lot, combined with an improved trigger group.