First year models are generally plagued with issues. That being said, I had zero issues with the 97 I had. Then again, I got it as a Fleet return in 2000 so it had had fair maintenance done on it. I sold it off in 2008.
Certainly, the 97s have a bad rap, here, for transmissions.
It is a general rule of thumb that by the time you figure out how to make it correctly, it is obsolete...
it's the same exact transmission as the 91-96s with slightly different connectors on the wiring harness, so I'm not sure why. The manual is literally exactly the same, too.
There really is no "first year" for XJs in the mid 90s. 90 they switched over the brakes and bearings and knuckles on the 4wd models and also went from 21 to 23 spline and from closed cooling system to open cooling. 91 they went to OBD 1 and changed the air conditioning compressor mount style, as well as (I think) making the 8.25 available. 92 they switched over the brakes/bearings/knuckles on 2wd models, and greatly improved the ABS setup. 93 they got rid of the CAD (iirc) and some other stuff that I forget. 94 they went to an external slave, changed the seat mounting (iirc, might have been 95), and I think went to the big ujoints on all models instead of just ABS ones, as well as deleting the fuel pump ballast resistor. 95 they went to a new steering wheel and cruise control switch setup and changed some connectors, and I think went to R134a (might have been 94.) 96 they added OBD 2, changed to the returnless fuel system, added the downstream o2 sensor, changed the rubber bushing on the cat mount from a half moon to a round bar, changed a lot more connectors, changed to a different fuel sender assembly, changed the belt routing and tensioning, new power steering pump, removed the idler by the thermostat housing, changed to the newer style transfer case output shaft and housing, added improved side impact bars in the doors, and went to 29 spline shafts in the 8.25. 97 they improved OBD 2, new body exterior, new body interior, new steering column, dual electronic airbags, new cruise control switches, CCD bus driven instrument panel, new fuel tank, new fuel sender assembly again, deleted the heater control valve (thank god), went to the improved air conditioning compressor hose attachment points (billet block with brazed lines and orings rather than flare nuts, thank god), made the TCU somewhat smarter, made heated mirrors available, changed the emergency brake cable routing, went to an RF RKE module mounted in the same location, moved the evap charcoal canister under the vehicle, and switched to a larger radio format. 98 they improved OBD 2 more, changed more connectors, made the TCU way smarter, went to an RF RKE module mounted in the dome light, and I believe added the leak detection pump system for the evap controls. 99 they upgraded the front brake rotors and unit bearings, new intake manifold, went to an electronic servo for the HVAC blend door. 00 and 01 just suck and I'm not going to say anything more about them... :roll:
Aside from the 86 to 87 switch (transfer cases, engines, transmissions, and engine management all changed across this year - all very major changes in my mind) and the 90 to 91 switch (RENIX to OBD 1) I can't think of a real well defined "split" anywhere in the production run. The 94/95/96/97/98 changes were very incremental in nature. Sure there were more of them from 96 to 97 but they didn't really make a defining change - IMO, Chrysler would have made all the 94-98 changes in around 97 or 98 if the feds hadn't legislated a lot of those changes before they were ready for it. That's why OBD 2 is pretty half assed on late 95s, all 96s, and all 97s, and really only gets smart enough to truly find faults around the 98 MY.