There is a 99 and 98 XJ that I'm going to be looking at tomorrow. I'm very new to this whole thing so I'm hoping for a sort of down and dirty on what to look for.

I'm good with the overall condition but I've read a few things about rear axles and what not. I've also heard that about mid-way through 98 they did a drive train change and I should avoid those models on. I've also been told that with later models there are issues with fluids leaking?

There really isn't a question in this post - more just a request for knowledge . . . I apologize for being so vague but it's hard when you don't really know what to ask.

IMHO 98-99 are among the better XJ years in that they had most things sorted out pretty well.
The standard inspection routine should be good- check for fluid leaks, odd noises or vibrations in 2 or 4WD, good shifts, no oil in the air cleaner box, no water in the oil or oil in the water, soot in the tailpipe, signs of fluids spitting out the dipstick or breather...no evidence of codes having been cleared right before you showed up, lol. (bring your scanner) no Lucas fixit bottles laying around....
Check underneath for rust too if appropriate.

Planning on wheeling it, or just on the road driving? Other folks may have ideas on what to look for in terms of offroad longevity.

99 will have a more efficient intake then the 98 but the 99 heads are prone to cracked heads and blown head gaskets. 98+ had a engine blovj woth extra cast ribs and a girdle to stiffen the engine. They are both OBD2 which is more versatile then any other EFI system jeep used. There shouldn't be any difference in the deivtrain options between those 2 years. Are you building for wheeling? The 242 t case has a part time option that allows 4wd to slip while on pavement. This can be a good option for daily driving on inconsistent snowy roads in spots. But for Wheelin it has more moving parts to fail, not as strong, and hangs down 1" lower. I believe you can find high pinion and low pinion front axles in both years. High pinion is superior. The rear can be an 8-1/4 or Dana 35. 8-1/4 is preferred because of bigger axle tubes and higher spline count. Look up pictures of diff covers to identify both.

97+ had more rounded fenders, reinforced b pillars, and steel rear hatches verse Fiberglass.

If the jeep has been lifted and or wheeled, check the steering box for play and secure mounting to the frame. Check the track bar for good bushings. Have them turn the steering wheel back and forth somewhat harshly as you inspect the front end components. Any rig you look at should be driven around town and on the freeway. Bumpy and smooth roads. Get the engine up to temp and make sure the electric fan kicks on at 210.

In the later half of 1999 Jeep started to put the "0331" heads on the 4.0
Mine has a build date of 02/99 and I have the good head "063"

there are a few other threads with plenty of accurate info, look them up

I say just find one with these criteria:
High Pinion Dana 30
Chrysler 8.25 (shoot for29 spline)
H.O I6
Not an 00-01 cause of the heads...plus 00-01 uses a low pinion d30 which runs into vibration issues at taller lifts.

Basically as long as its a 4x4 Cherokee with the i6 your good. I had an 88 with a dana 35 rear and renix setup..it was a great rig..my 98 is a lot more comfortable though with the newer body style...and it has the 29 spline 8.25

I'm wanting it as a daily drive with the option to go off road should the need arise. Weather gets sketchy around here too so I don't want to worry about snow anymore.

Thank You for the input! These are exactly the things I was talking about. Hopefully, before long, I'll be posting a picture of my new(ish) XJ.

Perhaps the most important option. 97+ came stock with cup holders! lol