I did this upgrade to my 1999 XJ, by doing the following:
- installing a resettable marine circuit breaker on the firewall). They come in various amp ratings - on EBay for $6-12 DELIVERED!
- re-routed the upgraded #2 cable from the alternator to the breaker
- installed a #2 from the breaker to the pdc stud
- I removed the fuse @ the pdc & installed a large copper hex head grounding lug (http://www.elecdirect.com/product/3eda5ed2-a62a-4032-affe-2785a89c7d35.aspx)
I found a rebuilt high-output 180 AMP alternator on EBay for $150 with a 1 year warranty. Been a few months and it's running great. Highest output I measured was at 203 amps. It was being sold as an alternator for a WJ (1999-2004 Grand Cherokee).
All I had to do to get it to work in my 1999 XJ was to change the pully (the WJ pully has 7 grooves), ours only 6. The electrical connections were "plug-n-play."
I increased the size of all of the positive & negative cables to #2's while I was at it - including the starter cable. For an extra measure of security (in addition to crimping the terminals on the cable ends), I sweat soldered them & applied heat shrink tubing.
At the battery I changed the battery terminal connections to the O'Reilly/Kragens "Super Start Battery terminal" PN# 01412 - $6 each. They allow for easy in-field disconnection of a cable if needed, without destroying the fitting.