When I bought the Jeep used in February of 2004, the brakes were passable, but definitely on their way out. I replaced the brake rotors and pads in the summer of 2004. I do notice a bit of rotor warping now, nothing I can't live with. I may check into slotted rotors and ceramic pads for the next brake job.
The transmission does make a squeak when it shifts during wide open throttle acceleration. No signs of any transmission failure, though. Fluid was in good shape when I changed it.
I have had no mechanical or electrical failures with this vehicle since I've owned it.
The power of the 4.7L V8 is impressive. Even though it's rated at 235HP, being in a fairly light SUV makes it quicker than a heavier model with more HP. (As compared to say, a GMC Envoy with a 265HP I6.)
The transmission shifts well, and the shifts quicken up when you're under full-throttle acceleration.
I opted for the NV242 transfer case, as I prefer to control the 2WD/4WD functions myself. No problems with it, and the Full time mode is handy for wet pavement, where acceleration in 2WD is hindered with wheel spin. I've off roaded it in mud to test out the part time, and it performed fine. (My lifted 94 Bronco with posi's and mud tires obviously is more capable, but I was impressed with the stock abilities.)
The interior is well laid out, and the sound system is the best OEM system I've heard. Full compliment of gauges is nice.