I've got an FJ40 with a 4BT in it. It is a cool project vehicle and it gets a lot of attention so if that's what your after I would recommend it. If your after a trail rig and daily driver like you mentioned I would recommend going another route, maybe doing a V8 swap like so many others have done to their JK's. Like mentioned above, the 4BT vibrates ALOT, smokes ALOT, and is very loud.
When I say it smokes it doesn't poor out soot like some of the :asshat: kids have with over-tuned diesel trucks, but the exhaust fumes from the 4BT are very strong/potent. Mine runs very well, and will only poor very light soot when under heavy load, but even though you may not be able to see the exhaust, you will most definitely smell and taste it. Your friends will not want to wheel with you and after the honeymoon wears off with your 4BT you probably won't want to yourself. Obviously decent speed and wind helps eliminate the exhaust issues for those around the vehicle, but not so good for a slow trail machine.
The vibrations are a lot for the FJ40 which has zero plastic interior parts. The only plastic interior parts it has are speakers, which by the way are a waste because you won't be able to hear them, and I have had to replace them a couple times because the vibrations make them fall apart. Unless you plan on removing all the cheap plastic interior from your Jeep the 4BT will do it for you. The vibrations are at a fairly fast frequency and can be numbing if you drive it for any extended periods. You may be able to fab a special engine mount to prevent some vibes, but keep in mind these engines were put into very large trucks with large frames and bodies which absorb and dissipate a lot of the vibes from the engine. Our little jeeps, and my little FJ not so much. For reference I have the mounts out of the truck it came in on the FJ.
Another thing is this engine has a ton of instant torque. Prepare to break Jeep parts. If you don't have ton axles in the budget that's another thing you have to consider.
Another consideration is you will not get great highway speeds with a 4BT. Granted I could probably gear a little better for highway use, but you may want to drive your friends TJ on various roads and freeways to be sure you'll be happy with it. I have no top end and can't use the FJ on the freeway at all. At higher speeds I can floor it and almost nothing happens.
Suspension will be another issue. The 4BT is a pretty heavy engine so whatever springs your running will have to be changed out for heavier rated springs.
It does get great fuel mileage though. Hand calculating I am in the 40 mpg range, but this is at 40 miles per hour on small farm roads.
If your Jeep is a second, third, fourth (or more) vehicle for you and your family then it might work out. Mine is a fifth and last to get driven for fun every once in a while. If it is your daily driver then in my opinion you would be making a huge mistake.
Don't mean to be a stick in the mud, just want you to be well aware of what my 1st hand experience with my 4BT is.
If you do end up going through with it, I hope you'll do a detailed build thread because it will be fun to watch. :thumb: