While stuffing a V8 in there sounds cool it has a lot of limitations, if it's a mall crawler thats one thing, you can live with some of them but for off road I don't think so. Stuffed is stuffed and they are a PIA to work on, even to change plugs on, tolerances are tight. For off road, with the body flex I'd be a bit nervous up near the radiator/belt area.
Personally I think a big stroker is the way to go if you have a 4.0L XJ to start with, if it's one of the 2.8L V6's then the the smart way is to go with the 3.4L V6, at least I think it's a 3.4L. I've seen that bigger V6 built up and used in a Toyota 70's something pickup that had been converted to a tow truck so it does have some nads going for it. The one I saw had a nice 4bbl holley up top.
The guy who built it, our first good local mechanic we found after moving up here from NJ, was also the first one I ever saw that did internal to external slave conversions on YJ's and XJ's as part of a clutch/slave replacement. He had a good source of bell housings from somewhere so that the whole job only added like $175 to the total job cost. That was in my pre-jeep days when a jeep was out of my price range so I did not pay much attention.
I think if I wanted a V8 Cherokee I'd hunt for one of the 360 ZJ's and go over it from bumper to bumper. That 360 equipped one is a rocket disguised as a jeep, co-worker had one, 97 I think it was, used to car pool with him to NJ. He had the engine built, balanced and bluprinted, cam, headwork, tube headers, dual cats, dual turbo mufflers and exhaust not to mention he gutted the interior and soundproofed the heck out of it two days after he got it back together and running, close the doors with the windows rolled up and your ears would pop it was so tight. Last time I saw him he was looking at superchargers, don't know if he ever went that route, he's somewhere in the southwest now working for SBC or Lucent.