Dirty Harry said:
That's debatable, The FCG is definately a no-no, The M-16 upper is AOK because there is no way an upper can be modified so the rifle can fire more than one round. I'm doing some research on the issue now. What I'm finding is you can even have an M-16 carrier in your AR! IMO I wouldn't use an M16 carrier. An unscrupulous agent at the range might decide to twist the regulations and apply "intent". But I would confidently install an M-16 upper with an AR carrier and shoot away!
I wouldn't use an M-16 carrier, FCG, or selector. Now if an M-16 upper is used with AR parts then it doesn't appear to be a problem. You're right that the upper isn't what makes it full- or semi- but rather the carrier, FCG, and selector.
Check out these two items of interest from the ATF:
"The definition of machinegun also includes a combination of parts from which a machinegun can be assembled if such parts are in the possession or under the control of a person. An example of a firearm meeting this section of the definition is a semiautomatic AR15 rifle possessed with an M16 bolt carrier, hammer, trigger, disconnector and selector. If the semiautomatic AR15 is assembled with the described M16 parts and the rifle is capable of fully automatic fire, the weapon possessed in conjunction with the M16 parts, whether assembled or not, is a machinegun as defined.17"
http://www.atf.gov/firearms/nfa/nfa_handbook/chapter2.pdf
"IMPORTANT INFORMATION CONCERNING AR-15 TYPE RIFLES
ATF has encountered various AR-15 type rifles such as those manufactured by Colt, E.A. Company, SGW, Sendra and others which have been assembled with fire control components designed for use in M16 machine guns. The vast majority of these rifles which have been assembled with an M16 bolt carrier, hammer, trigger, disconnector and selector will fire automatically merely by manipulation of the selector or removal of the disconnector. Many of these rifles using less than the 5 M16 parts listed above will also shoot automatically by manipulation of the selector or removal of the disconnector. Any weapon which shoots automatically, more than 1 shot, without manual reloading, by a single function of the trigger, is a machine gun as defined in 26 U.S.C. 5845(b), the National Firearms Act (NFA). In addition, the definition of machine gun also includes any combination of parts from which a machine gun may be assembled, if such parts are in possession or under the control of a person. An AR-15 type assault rifle which fires more than one shot by a single function o the trigger is a machine gun under the NFA. Any machine gun is subject to the NFA and the possession of an unregistered machine gun could the possessor to criminal prosecution. Additionally, these rifles could pose a safety hazard in that they may fire automatically without the user being aware that the weapon will fire more than 1 shot with a single pull of the trigger.
In order to avoid violations of the NFA, M16, hammers, triggers, disconnectors, selectors and bolt carriers must not be used in assembly of AR-15 type semiautomatic rifles, unless the M16 parts have been modified to AR-15 Model SP1 configuration. Any AR-15 type rifles which have been assembled with M16 internal components should have those parts removed and replaced with AR-15 Model SP1 type parts which are available commercially. The M16 components also may be modified to AR-15 Model SP1 configuration.
It is important to note that any modification of the M16 parts should be attempted by fully qualified personnel only.
Should you have any questions concerning AR-15 type rifles with M16 parts, please contact your nearest ATF office. Our telephone numbers are listed in the ?United States Government? section of your telephone directory under the ?United States Department of Justice.?"
http://www.atf.gov/firearms/nfa/nfa_handbook/appendix_b.pdf