I'm pretty sure you can pull off a 215 on a 7" wide wheel. There aren't many XJ wheels that are 6" wide (one old steel and one old rare alloy), but 215's are fairly common on XJ's and even listed as OEM much of the time. I don't think you should go any narrower than 215 on a 7" wheel, though.
Again, I'd totally use this tire IF I had an appropriate use for it, but it doesn't look too MPG friendly, and it also doesn't look too quiet. It just doesn't jive with what I do. Should be great in snow and mud, and if I was any kind of off-roader and had 16" wheels, I'd totally give it a try. That 215/85 size is very much my style. I wish I could find 215/80 or 215/85 in a 15" wheel variety, but 80+ profile tires seem extremely uncommon. The only tire I've found with such a size is Interco's TSL Radial--extremely NOT my style. I wonder if they're less safe or harder to manufacture or....I dunno why they're impossible to find, but I want.
Build Thread -- http://www.jeepforum.com/forum/f177/whats-chrokeese-build-thread-2525690/