My interior lights wouldnt come on when the hatch was opened only came on with a door open, it drove me nuts. I had seen others replace the whole light ficture but I didnt want to loose the factory look. So I took it apart and tried this, and it worked. You can't manually turn it off and on like this, but I couldnt any way. It comes on when I open the hatch which is all I need.
For most XJ's it seems to be caused by the switch melting. Just pull the switch out, clean the terminals, then connect the two with some kind of wire (i used a speaker connector). Be sure to put electrical tape over the wire.
Heres the link for the pics
http://picasaweb.google.com/TWillGOLF/XjCargoLight#

 

Just so you know, on all 97+ XJ's (not sure of 96 and prior) there's a nifty feature concerning your interior lights and the rear hatch: The cargo area light is actually a push-button light. If your lights are on with just the hatch open, you can literally push the light, and they all turn off. Do it again, they all come back on. This is only for the rear hatch. I'm honestly amazed how many XJ owners DON"T know about this.

 

my button is broke i can only turn the cargo light on with the headlight switch or opening the doors. anyone do aftermarket lights?

 

My 89 Laredo has that feature...did take me a few days to stumble across it..