Try changing 16 to 16.0
SELECT
ROUND(WeightInOZ / 16.0, 2)as WeightInLbs
FROM
Inventory
You see strange results because you are processing the results of your division as a whole, not a decimal. The directive .0tells the sql server to treat it as a decimal number.
UPDATE:
If trailing zero makes fun of you, you can always do this:
SELECT
CAST(ROUND(WeightInOZ / 16.0, 2) AS NUMERIC(8,2)) as WeightInLbs
FROM
Inventory
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