Would I have to compile the library with vs 12 first or should it just work after I link stuff?
You'd have to use SFML 2, just kidding...
But seriously SFML 1.6 is now over 2 years old, hasn't been maintained at all, has quite a few nasty bugs and lacks so many shiny features; how'd you be able to use such an old version with a shiny new IDE like VS 2012?
If you still want/have to, then you'll have to recompile SFML 1.6 on your own.