I would highly recommend a ZJ. I've had 5 XJ's over the years and they are great, but for kids (especially a baby), you'll want a ZJ. ZJ's have wider rear doors so it's easier to load/unload kids in car seats. Plus they have 4 coil suspension, so a nicer ride. As far as I've noticed, the V8's don't get much worse mileage than the 4.0HO, pratically the same. XJ's are VERY common and inexpensive to buy, but ZJ's run a little more $$; ZJ's do hold their value better though I think. Stock Jeep parts are inexpensive compared to other vehicles, and bone yards are full of them. There are many many parts that can be sawpped from XJ to XJ regardless of model year difference, except swapable parts dwindles a bit when trying to get certain parts off a '97+ XJ for say your '95.
Subaru would also be a good choice, but I would get that Volvo AWD wagon (S70?) before I would get a Subaru because 90% of the Subaru owners around here are not of the hetero community if you know what I mean.
As far as Jeeps go, you should be able to pick up about a '00 XJ (PWR everything, cloth seats) for your price limit, or labout a '98 V8 ZJ well equiped.
Good luck!