You have a NP231 transfer case.
With respect to 89Mock, while the NP231 is the most likely (by virtue of it being the "standard" and the NP242 the "optional" case), it's not entirely impossible that boncrshr has a 242.
The NP321 has 4 modes: 2Hi, 4Hi, N and 4Lo. In 4Hi and 4Lo, an orange "Part time" light should illuminate in the instrument cluster. These modes, being part-time, are NOT to be used on-road/high-traction surfaces as with no center diff in the case you risk severe driveline damage. Only use on surfaces where at least one wheel can slip a little.
the NP242 has all the modes the 231 does, but adds a "4 Full-time" between 4Hi and N. As with the 231, 4Hi and 4L are part time and illuminate an orange "part time" indicator on the dash. In 4-Fulltime, a green "full-time" light illuminates on the dash instead of the orange "part-time" one. The full-time mode can be used under any conditions as the 242 does contain a differential between the front/rear outputs.
Generally the shift bezel on the console and the light(s) on the dash are sufficient to identify your tcase, but if you are missing those (or have reason to believe the vehicle may have been "messed with prior to your ownership), the ultimate answer is to climb under the truck and look at the circular red/white metal tag on the rear of the case itself, which will identify the unit as either a "231J" or a "242J".
Rob
P.S. I chuckled at your username, boncrshr - liked the reference in it. Do you by chance drive a green jeep with purple trim, and hang out with 5 other similarly-colored XJs?
