i have a 2000 grand cherokee limited....4.7L V8...quadradrive 4wd....upcountry suspension...tow pkg., etc. i bought it in nov. of '02 w/ 57k on it, and during the 60k service (~$800 at the dealer) they also had to replace 3 leaking seals ($150) - both diffs and the transfer case. since that time, i've put over 20k miles on it with no problems until recently - just before Christmas (almost exactly a year after my previous "issues") i had a couple CEL's; one led the dealer to replace the PCM under the federal emissions warranty; the second involved replacing the throttle position sensor at my cost ($200).
all in all, i think it's pretty reliable - it has its issues, and i won't deny that the last CEL almost drove me to trade it in on something else until i realized just how little it was worth on trade. it's very competent offroad, and i've had mine through some moderate trails a few times in the last year or so - nothing hard core, though.
definitely stick w/ the V8 - the 4.0L inline 6 just isn't as well-suited to the heavier WJ ('99-present) grand cherokee as it was to the previous ZJ ('93-98). gas mileage will be very similar between the two, but the 4L is pretty slow in comparison. i'd stay away from the '99's if you can, since those have fallen under the typical "don't buy the first year of anything" category and tend to be more problematic than the later years.
just like ford, they did start decontenting things over the years, and i personally like the seat leather pattern in the 99/00 years better than '01+...so i looked for a 2000 and found it.
if you have any specific questions, feel free to ask....or check out
www.jeepsunlimited.com and
www.wjjeeps.com (the latter being an invaluable source of specific info about every '99-present JGC, from TSB's to how to take out the radio).
i like mine, though i'll confess to being more of a car guy at heart than an SUV guy, so the gas mileage and its preference to staying below 80 mph irks me a bit. c'est la vie, though - it does come in handy when hauling mtn. bikes or other crap and does handle itself quite well offroad.
hth.
