With a 4.2L head a two inch (2") pipe is fine.
If you are upgrading to a 4.0L HO head then two and a quarter inch (2.25") pipe is all you need. Your new mill will breath just fine in either case.
You'll loose your bottom end torque on the trail if you go to a larger diameter pipe (trust this ... cams and headers are a science).
A 4* advance on the cam with the small tail pipe nets lots of grunt.
My 4.2L with a ported 4.0 HO head, cam, etc ... blows through a '91+ 4.0L Borla 2.25" header with a transition to a Borla CJ 2" cat back (no cat) via a see through Borla muffler and easily revs through a 4.0L HO's 5K red line.
Check my Jeep site (below) for details ...