If you really want to put 35s on your TJ, I recommend a lift of 4." or more. Additionally, I recommend that you do it right the first time, and don't go with anything less than a high quality lift. Rubicon Express tops my list, but RockLogic (Ilean or Vonski) and Anarchy Offroad (SukaB) do great work. I strongly recommend you go with a longarm kit. A longarm kit is far superior to a short arm kit for on-road ride quality and off-road ability. Unfortunately, $1500 isn't going to get you into a rubicon express long arm kit (and it may or may not get you into a longarm kit from either of the two shops above)
Other items you need to consider are a slip yoke eliminator with a new rear driveline. This is going to set you back anywhere from $300 to $500 depending on what you get and who you order it from.
Depending on what gears you currently have, I also recommend changing them. I have 4.10s, but I wish I would have gone with at least 4.56, and when I build my new axles (one of these days....), I will likely go with 4.88s. You really lose a lot of torque when moving up to the taller tires, and 3.73s just don't cut it in my book.
So, while we're thinking about gears, D30/D35 combinations require a different carrier when you go to the 4.10s (or 4.56, 4.88, etc. someone correct me if I'm wrong here), so you might as well just drop the money on the lockers of your choice (here's another $1000 - $1500 or so).
Oh yeah...if you do have the D35 (diff cover is oval in comparison to the D44 which looks a bit more like a stop sign), you'll really want to re-think putting 35s on it right away. I know people who have run 35s with the stock D35, but they always carried spare axle shafts and I know one guy who broke and had to do an on-trail repair at least once (and maybe twice, although i was only present for one of them). Of course, if you plan to mostly drive it on the street, D35 with 35" tires won't really cause you too many problems. It is only when you start crawling that you will get into trouble.
They weren't kidding when they posted Just Empty Every Pocket. Although the wrangler is a fairly capable vehicle in stock form, locked diffs and larger tires (with appropriate lift) really enhance its off-road performance.
Good luck!
