No GC (regular Cherokee), but I can offer some advice.
Rewire steering wheel controls to interface with comp. Ditch stock cd player and (hopefully) replace with an aux in adapter. If aux in can't be had, you'll have to replace the HU. (or use an RF modulator, which sucks)
I mounted my LCD on a bracket sitting out from the dash. Didn't want to mod the dash.
$1000 should be more than enough for what you want. The display will be the most expensive part (usually). Head to the store to see prices on those. You don't need much processing power to play dvd's these days, but do research on some of the mini motherboards to make sure they fit the bill (if you're going mini).