I have a 99 5spd that I bought stock (3:07), I went up to 31's, and the power loss was significant, but not something that cant be lived with. (drove it from CT to CO) When I went to a 4.6 stroker (stock intake/ exhaust), I would say it returned to maybe a little better than stock, however there is still alot more stress on the transmission and engine mounts. Low gears are very long, and it feels like your pulling a trailer until about three grand. I can use fifth, but only If im doing 70+ because otherwise rpms are too low to sustain speed. Any significant hill and I am in 4th, and going up I70 through the mountains I run 3rd at over 3k up the big hills, and can pass pretty easily. My setup works, but I am definitely planning on going to 4:10's. According to my math, the feeling of 4th gear now, will be about the same as 5th when I change my rear end.
I know the 5speed is a bit different than the aw4, but hopefully my experiences can help you with your decision. You can absolutely run 31's on 3.55's, but you may find yourself in the slow lane more often than you would like, and in 3rd at higher rpm's.
As far as the "more speed" argument, lower gears will effectively lower your top speed, however, to me, this is irrelevant. Your jeep on 31's ( if it had the power) would do at red line in 4th about 190mph, and in 3rd 136mph.With 4:10's, these numbers drop to 170, and 125 respectively. I have had my jeep to just over 100, and I dont plan on doing it again. This combined with the fact that most jeeps lack the power to hit these numbers anyways makes this unimportant to me. What I look at as far as top end is the rpm's ill be turning at 70. With 4:10's, you'll be at about 2260rpm in 4th which is right in the middle of where you want to be for good mileage with a 4.0. On the low end, you will change gears sooner, but who cares, its an automatic. as far as more power, you will have about 15.5% more torque at the rear wheels with 4:10's. This translates to faster acceleration.
Its really your call if you regear or not, but I would say go with 31's, and regear when you can afford it. Many people have had no problem doing this, including myself.
I made this chart a while back for gears vs tire size and rpm vs speed if you want to have a look for yourself
http://lightfootxj.webs.com/index.htm
Hopefully this gives you an idea of what to expect.
~Lightfoot