DD is short for daily driver
What it sounds like you are looking for and best for you is (In my opinion) a 91-95 cherokee. Look for a 4.0 auto preferably without ABS because it will be *more likely* to have the better rear axle(Chrysler 8.25). Although in those years it will not be the desired 8.25 (the "good" 8.25 started in late 97 in XJs) so it is not something that should make or break a deal for you, as you'll swap it out with something or modify it to your liking. Dont worry too much about the transfer case, as for me I would like to have the full time 4wd option(NP242) in a winter daily driver but the more common case (NP231) does not offer it, but you can do more to change that case around for offroad performance.
My suggestion for you is to find a clean cherokee newer than 91 so it has the High Output 4.0 with an automatic. If your budget is only $3000 start to finish, buy a middle mileage, which is now around 150k, and do every basic maintenance you can to it. Remember, the NEWEST cherokee you can buy is still 13 years old. Change every fluid it has, transfer case, differentials, tranmision, engine oil, coolant, ect. Change the battery, change or grease the u joints and ball joints while you're under there before they fail and keep you from getting to work or school.
Then if you still have some jingle in your pocket spend some time in the junkyards. Pull a heavier duty steering out of a grand cherokee with a V8 engine, and if yours doesnt already, get a front skid plate, transfer skid, and gas tank skid out of a similar year cherokee that still has. You'll be amazed at what a little stock XJ can do before you dump thousands into it.
After youre comfortable and you know your XJ is reliable, pick up a quality 3.5" lift. Buy on the higher end so you dont regret buying crappy parts and end up swapping them out little by little and pay twice as much over time to get the same damn thing you shouldve the first time. A rubicon express 3.5" kit and some 33x10.5 All terrains for example, is a awesome upgrade for a weekend warrior to get you to the nice camping spots, secluded fishing holes and then back to work monday morning and not rattle your teeth out on the frost heaves.
They are all pretty much the same. In 96 they kept the old body styling, changed the onboard diagnostics, and changed some other odd ball things. Then in 97 they changed the styling and tweaked the OBD again. So 96 and 97 had some year specific parts, but not too much to be a major concern.
