'98 Cherokee i6 4WD is rated for 14/16/19. If you drive over 65 on the highway, you'll probably get closer to 16 than 19, especially on an engine with some miles.
Let's say you get 2 weeks vacation and work 5 days with a 100 mile commute. Gas is $2.80 but don't expect it to stay there, gas always goes up. At $2.80 though, you're looking at spending just shy of $4500 per year in gas. Getting a vehicle that gets 20mpg would save you $900-1000 per year in gas, and going with something like an Accord (~32mpg) would save you about $2200 each year.
Taking maintenance out of the picture (let's assume a Cherokee is just as reliable as an Accord), and assuming your insurance is as cheap as mine, you could buy a new beater Accord every 2-3 years in the gas savings alone, while still paying for the insurance for the Cherokee to sit in your driveway unused. My view is that there are better things I can be doing with that $2200 each year. When gas goes back up to 3.60, which I expect it will within the next 2 years, a Cherokee will have a nearly $3000 premium every year over an Accord. Over the course of your life (and in today's dollars), continually driving a Cherokee over a smaller car will be about $150,000 in gas. If it's worth it to sit in a 4WD Cherokee on your way to work over an Accord, you've seen the math and we're all entitled to do what we want with our money.