I own a 96 XJ and can testify that they are reliable and capable. That being said, mud is not good for any vehicle. If you just want a couple inches of lift and run moderate size tires (31"), theres nothing wrong with a Liberty. There are several companies making small, inexpensive lifts for them that will allow room to run 31" tires and the aftermarket is gaining speed for them. If you want to go bigger, you should go for the Cherokee. The sky is the limit for lifts just depending on what size tire you want and how much $$$ you want to spend. the Libertys are prooving to be on par with everything else as far as reliability.
Again, nothing wrong with the Cherokee, I wouldnt part with mine for anything, but the Liberty isnt the devil vehicle its sometimes made out to be, it just has limits off road.