Remember that, in Iraq, the Army has relied FAR less on personal small-arms than the Marines. Most of the Army's work has involved arty, tanks, and vehicle-borne belt-feds. When they have used rifles (and not all Army riflemen have M4s), it has been in very urban areas. Given this use, I wouldn't expect to see many problems. And remember, we haven't seen any detailed after-action reports from the Army yet.
In Afghanistan, the Army has to rely on the weapons they're carrying, and they have many oppertunities for longer shots, yet they started primarily with M4s and SAWs. They've recently added M14s and M16A2s by demand of the soldiers, which is significant (though not overwhelmingly so; we can all agree that those weapons are a better fit to the terrain overall).
I'm not saying that it isn't a good idea to give vehicle crews and similiar personell M4s instead of M16s. That's an application that makes sense. Another one is CQB/house clearing, which I'd much rather do with an M4 than an M9 pistol!
But I think the Marines chose VERY wisely by keeping the 20" M16 as the standard infantry rifle. Now they need to address the fact that they totally screwed themselves and everyone else when they LENGTHENED the stock back in the early 80s. Did you see all of the pics/video of Marines who had to hold their stocks on top of their shoulders like bazookas in order to fire their rifles? I anticipate that MSS stocks will become VERY popular in the next couple of years.
-Troy