What is your intended usage for your XJ? Do you get snow where you live?
If your primary usage is offroading, get a 231. It's physically smaller, cheaper to upgrade and has more aftermarket accessories, such as skid plates, available on the market.
On the flip side, the NP242 is a great transfer case. Take all of the functionality of a NP231 and add gear-driven AWD. You'll have to pry the 242 from my cold, dead hands. I put close to 100 bone dry miles on my XJ this weekend in AWD; no need to shift it in and out. Great for wet grass, wet boat launches and dirt driveways while towing ~3k lbs. Awesome in the snow, just put it in gear and leave it, if you want... Only downside is, it will go to 1wd, so you need to remember to put it into 4PT before encountering one of those situations...
Either route you go, the SYE kits with the replacement rear shaft, pure beef, and replacing the shifter linkage with "ball joints" and removing the shifter pawl inside the vehicle are the way to go... As for me, heading back out here shortly to finish my week of R&R and no devices :cheers: