There are better and worse 2.9s. Early 2.9s had head cracking problems which they rectified for the 1989 model year, according to the tech library:
http://www.therangerstation.com/tech_library/2_9_Page.shtml
Other than the head upgrade, an earlier 2.9 should work in your 1989 BII.
Yeah thats what I was thinking, but I'd be keeping my old motor so I'd have it if anything ever did happen to the heads, I'm having a really hard time deciding on whether to even mess with the 2.9 at all or just bite the bullet and swap in the 4.0 out of an explorer I have. I'm only worried about a few things:
1) the time involved in the swap since I have very little free time right now
2) the risk the motor may not be 100%
3) fear of how my fm146 will hold up against the 4.0
4) the ever present issue of wiring.
However, seeing as I already have the 4.0 it would probably be cheaper to simply pull it, do some maintenance on it (new gaskets, new oil pump, clean up, etc.) than either of the options I have with the 2.9, but as I said I'm just not 100% comfortable with the wiring.