If you're into Hybrids and want something about the same size as your Cherokee, check out the Ford Escape Hybrid/Mercury Mariner Hybrid/Mazda Tribute. ~30mpg city and highway, plenty of interior room for you and the kids, a basic AWD setup (not quite as off-road worthy as a Jeep, but more-so than a Prius), and doesn't cost much more than a Prius.

Here's one messing around off-road:

http://www.youtube.com/watch?v=P1iHGwj7MUA


Just a thought, but it sounds like it would be perfect for you.