Depends on what you want to do with it (daily driver, muddin, rock climbing, etc). If you're mostly going to be driving around town, some off-roading, want a better than stock ride, and aren't completely broke, you're where I am
I'm thinking a good starting point is 2.5" OME (Old Man Emu) springs, non-greasable bushings, new U bolts, and new shocks (not really decided, but Bilstein 5100s seem popular, IIRC). You *may* need to do a transfer case drop, apparently you can't really predict that because it varies from jeep to jeep for that amount of lift.
The springs and bushings will run you around $130 each, so X4. The transfer case drop is 75-80 bucks, U-bolts are $10x4 ish, and Bilstein's are $85X4. So $900 without the TC drop kit, $980 with.
You could do something like this, too: http://www.quadratec.com/products/16090_00X_B_PG.htm
, but I think you can piece it together and improve the shocks for about the same price.
You should be able to run 31's on that with no other mods.
I've also seen this recommended recently for a primarily street jeep: http://zoneoffroad.com/product?ki=456&gr=-1
I'm not sure if that will improve the ride quality like the OME's, but it's half the price.
I'm not a jeep guru or anything, but I have been "researching" this for a couple of months now.