LV, you can use your factory intake, but it's going to cost you some power. Clifford makes a nice one that allows you to run the wonderful 390cfm Holley four barrel and improves breathing greatly. You will need a 4.0 exhaust manifold or a header made for the 4.0.
The head requires some water jacket mods to work on the 4.2, but any rebuild shop should be able to handle that. I think the head bolts are 1/2" on all 4.0 heads too, but your 89 4.2 should already have them. If not, drilling and tapping the 7/16" holes out to the 1/2" thread is an easy fix too, I also think some stepped bolts or spacers are available if you don't want to drill your block.
It's worth 30-40 horses on the 4.2, and even more with a good camshaft, header, and four barrel intake. Things like roller rockers and a hotter ignition make it work even better. Short of a big bore 4.0 based stroker, this route will give you the most your going to get out of a Jeep I6 without nitrous, supercharging, or a turbo. I'm planning a stroker for the TJ, it's gonna be a V8 eater :twisted: