I have a Cherokee with 4.0 np242 transfer case, aw4 transmission, a dana 44 rear end. I am trying to find out the perfect gear ratio to run 35" Boggers I am trying to get the best gas mileage that I can, I don't mind if it is a little sluggish.

The higher the ratio the more torque or more speed that you get?

The higher the number more torque. The lower the number more speed. You probley should use around a 373 or a 411 ratio so u have enough power to get moving.