258 6cyl to 304 V8
There is alot of debate between swapping in a V8 or 4.0L. Both will be substantial improvements over the stock 258 or 4cyl, while each excells in it's own way. V8's tend to have more potential than I6's, and often parts for them are cheaper. I6's are lighter, can easily have more torque than a modded V8 (better offroad), their torque is available over a much broader rpm range (again better offroad), and will bolt right in place of the original 258 (easier and cheaper swap). I chose the rout of modifying (stroking, boring, custom cam, etc.) a 4.0L. It will have plenty of hp and torque, alot more than a stock 302, and even with 35's will be pretty damn fast. If the debate is between a 302 and a 4.0L, I would vote 4.0L. Especially if the 302 is an older, carbureted one. As for the transmission, the NV3550 transmission is a strong, dependable, medium duty transmission. It is used in newer dodge dakotas and jeeps, and is conservatively rated at about 300 ft/lbs. As for a comparison to a Tremec, it's no TKO, but is close to a Tremec 3550. The NV3550 is not a very common swap as far as I know, but is the best 5spd to ever come factory in a swb jeep. I'm installing one behind my stroker, and the only reason I went with the NV3550 is that I did not want the added weight or installation inconveniences of an NV4500 (bullet proof, 5spd big truck transmission with granny low). Other options are the T18 (bullet proof, heavy, 4spd, some have a granny low), the NV4500, and of course automatics. For a 4.0l swap, you will need the engine, wiring harness, ECU, electronic external fuel pump, and crank position sensor conversion kit unless you get the bellhousing from a newer jeep. This link should give you an idea of what it involves
http://www.4x4wire.com/jeep/tech/engine/fi40swap01/ . Chances are the original drivetrain will hold up to a stock 4.0l, but upgrading the transmission would be a good idea if you currently have a Peugeot in there. I'm not too sure of what a 302 swap will require aside from the engine, wiring harness, bellhousing/transmission, and motor mount conversion. Any more ?'s, feel free to ask. Research followed by research is the key here. Whatever, you choose, good luck, and let us know how it goes!