I'm going to us JK shocks... I got a set for $30. It does take some modifying, but its cheaper than the bilsteins. Also read Monroe Magnums are the same as OME shocks.

 

The route I took to get the front end up a couple inches is replaced the stock Cherokee springs with a set of V8 ZJ springs from the junkyard. They netted me 1.75" of lift (stock bumper, no skid plates, etc.) In my opinion they ride better than the stock springs. It is a firm ride, but not harsh. From my JY they were less than $50, and IMHO a much better option than spacers. Also, consider factoring an alignment into the cost of your lift, if that wasn't said already.

 

Most everywhere has them for the same price, around $78 a pop depending on length. I got mine from 4wheelparts.com