BIIs are great lil trucks off-road. Out of the box with a set of 30" muds and they'll go pretty much anywhere a stock jeep wrangler will. I ran an 89 Bronco II with sagged out rear springs, running worn muds and chains on the rear in snow so deep I was pushing it with the grille. No lie. Open diffs too. I ran it for awhile with an without mud tires off-road on some trails that were local to campus an open at one of the colleges I attended and it did surprisingly well. Then I sold it to get the money to get my choptop on the road...
But if you're gonna go over 31" tires or put a locker in the front, do it right an put a D-35 front axle in it. I've toasted two front shafts so far in mine with 33's and a lockright. The 89 I sold had an auto trans an manual t-case, my choptop has a manual trans and manual t-case. Off-roading a manual can take a bit of skill at times, IMHO, you have to be fully comfortable driving a manual trans to take it wheeling with success. I'd also suggest doing a 4.0L clutch upgrade if you can as well, it'll grab a lil better than the 2.9 one. I have some wheelin pics around here somewhere, I'll have to find 'em an post up.