If the say it's got Midi 16 it means that it can play 16 different instruments simultaneously. Hmm... but I always thought that S40 phones were only 4-chord polyphonic. Just a doubt, still check it out.
Playing a number of instruments, and number of notes at a given time is different.
For example, in say Fur Elise, you have only 1 instrument i.e. Piano. But in the piano itself you are playing multiple notes together. That does not mean that the cell is using all it's channels.
Each instrument takes one channel and not each note. Like for instance you could play 128 notes on a 16 poly cell(it's practically not possible) by playing 128/16 =... 8 notes in each instrument of the 16 channels available at a given time.