I think I'm the minority on this one but I'm for maintaining stock bore/stroke and go for high RPM horsepower (maybe just bore .060" over). Make it breathe and use short gears (like 4.11's on stock OD tires).
Correct me if I'm wrong but I believe the '96+ uses lightweight pistons, rods and a different (lighter) crank shaft. My friend just got a '97 and I was amazed how easy it was to run right up to the 5250 rev limiter. With an ASE chip (increasing the rev limiter) a serious cam, head work, headers and the rest, It could pull strong right up to 6000 rpm (or beyond) with the stock crank.
One thing a lot of people forget is the XJ is fairly light and the 4.0 is already torquey. Tall gears makes the acceleration "heavy" therefore requiring more torque. Instead run shorter gears and take advantage of the HP potential.
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Now dead '91 XJ (donor vehicle) -->
Mods
Coming soon '97 XJ, I-6, 5-speed, 4WD
JeepSpeed East /
SCCA RallyCross
The race course