Early Cherokees do suffer from rust, so like others have said, check the corners and sides of the roof (they rust from the inside, out, if the A/C hasnt been run regulaly) Check the boot floor, near the edges and where the spare wheel carrier bolts in, and under the back seats. Also, look for rust on the front mounts for the rear springs. Check for wet carpet in the front footwells (a sign of a leaking windscreen seal)
Steer clear of tacky cloth interiors, or those claiming to be "Half Leather" (its plastic). On the "SE" models, the leather peels up from the top of the dash, and looks pants.
Check that all the electrical goodies work. These can be expensive to fix. The A/C usual wont work. The seals will have dried out, and it will leak refrigerant like theres no tomorow, if you try and top it up.
Check for noisy back axles. Make sure that the auto box and transfer case change smoothly.
Engines are pretty much "bullet proof" and will still be strong and reliable with intergalactic mileage
You can expect 18-20 mpg, in reality.
There are still a few of these around, for decent money, so you can aford to be picky. If it hasnt got some history and paperwork, walk away.
Hope this helps