I have done most of my towing with a 2000 GC, before that I had a '89 Cherokee. The 2000 GC has a V-8 and towing package, and tows awesome. The boat weighed close to 3000lbs, and only had surge brakes. (1999-2004 V-8s have a 6500lb capacity)
The from the factory tow package has a tranny cooler built in. I would recommend finding one with that option. I think the GC while towing accelerates fine, but then again I was used to an old & tired Cherokee with the I-6 and an aftermarket hitch. The one down side I can think of is gas mileage, even though the V-8 is a 4.7 it is hardly fuel efficient. I only get about 17mpg without towing.
As far as years, I would opt for 1999-2004. 2005 was a newer gen with a higher tow capacity, but I still prefer the second gens; especially the interior and paint quality. Pre 1999 vehicles arent bad and with the 5.2 V-8 also have a 6500lb towing capacity, but they are getting quite old now and its harder to find a nice one. Little known fact about the first gen GCs, the vehicle was almost completely designed by AMC before Chrysler bought them.
If you have any specific questions, let me know.
Last edited by MattieK27; 06-22-2010 at 2:36 PM.