One of the most substantial benefits to the 160x200 16-color mode is that it uses half the video memory of the 320x200 16-color mode (16KB vs. 32KB). The CPU needs only send half as much data to the video memory, improving performance on any machine.
One drawback with the 160x200 16-color mode is that you can only uses 20-columns of text at the standard 8x8 pixel IBM character set. In this case, developers typically chose two options. First, they could use their own character set which would fit into a smaller pixel matrix. Maniac Mansion is an example of this option, it uses 4x8 characters for the Tandy mode and the standard 8x8 characters for CGA, MCGA, EGA or VGA modes. Second, they could use the 320x200 16-color mode, which is what King's Quest and its sequels use. In King's Quest, the pixels for the graphics display are doubled, improving performance to a good extent but not as much as if the true 160x200 mode was used.
Another benefit, which is under-appreciated these days, is that games using this mode look very good on a composite monitor. The IBM PCjr. and the early Tandy 1000s (1000/A/HD/EX/HX/SX/TX) have a composite video output jack. In a 320x200 mode, these computers show artifact colors that are markedly different from an IBM CGA card.
But in a 160x200 16-color mode, their composite colors correspond to their RGB colors quite well. This is because in this mode, the pixel clock is the same as the NTSC color burst frequency, 3.58MHz. Because the pixel clock is aligned with the color clock, the TV's color decoding circuitry can keep pace with the color changes being sent to it. Even in a psuedo-160x200 game like King's Quest, the doubling of the pixels makes the graphics look as they should, color-wise.
By contrast, the pixel clock in a 320 pixel mode is 7.16MHz and 14.318MHz in a 640 pixel mode. In those resolutions, the color decoding circuitry cannot keep up, leading to artifact colors. The timing of the PCjr. and Tandy video controller chips is "off" compared to the IBM PC CGA, leading to different artifact colors. The 320x200 16 color mode does not look good on a composite monitor, the artifacting becomes ugly at this point, especially when it comes to dithering.
The final benefit to the 160x200 mode is that the end result looks acceptable on a video capture device. Capturing 320x200 or 640x200 graphics from a CGA card, PCjr., Tandy or EGA card that gives a good representation of RGB color is much, much more difficult. First, you need a board that will convert the digital RGB signal to an analog RGB signal and preferably keeps color 6 brown, not dark yellow. (From the composite video output, color 6 will look closer to dark yellow than to brown.) Second, you will need a hardware device that can capture 15kHz RGB. They do exist, but most people would probably use a scan-line doubler and send it to a VGA capture device.
You may think that only a handful of games used a 160x200 mode, but you would be surprised. Here is a list of forty nine games that primarily use a 160x200 16-color mode for their graphics when run on a PCjr. or a Tandy 1000 :
|Black Cauldron, The|
|Boulder Dash II: Rockford's Revenge|
|Donald Duck's Playground|
|F-15 Strike Eagle|
|King's Quest I: Quest for the Crown|
|King's Quest II: Romancing the Throne|
|King's Quest III: To Heir is Human|
|King's Quest IV: The Perils of Rosella|
|Leisure Suit Larry in the Land of the Lounge Lizards|
|Manhunter 2: San Francisco|
|Manhunter: New York|
|Mickey's Space Adventure|
|Microsoft Flight Simulator (v2.0)|
|Mixed-Up Mother Goose|
|Murder on the Zinderneuf|
|Dr. J and Larry Bird go One-on-One|
|Pitfall II: Lost Caverns|
|Police Quest: In Pursuit of the Death Angel|
|Space Quest I: The Sarien Encounter|
|Space Quest II: Vohaul's Revenge|
|Super Bowl Sunday|
|The World's Greatest Baseball Game|
|Winnie the Pooh in the Hundred Acre Wood|
|Wizard and the Princess, The|
|Zak McKracken and the Alien Mindbenders|