The Laredo comes standard with Chrysler's 210-hp 3.7-liter V6, borrowed from its sister trucks, the Jeep Liberty and Dodge Ram, with its own five-speed overdrive automatic transmission. The 3.7-liter uses single overhead cams and has been upgraded for '07 with electronic throttle control. The V6 gets an EPA-rated 17/22 mpg City/Highway, significantly better than any of the V8s.

The 4.7-liter V8, on the other hand, works really well in the Grand Cherokee. This modern, overhead-cam engine is a paragon of power and smoothness for around-town and highway driving. It has a broad torque band, a lovely sound, and electronic throttle control (drive-by-wire) that's easy to use and precise in tricky downhill off-road situations. If you don't live in the mountains and don't usually tow anything, this engine might be your best choice. The 4.7-liter V8 produces 235 horsepower at 4500 rpm and 305 pound-feet of torque at 3600 rpm. It's EPA-rated at 15/20 mpg. And for 2007, in 45 states, it's flex-fuel capable, meaning it can run on gasoline or up to 85 percent ethanol (i.e. E-85).

The 5.7-liter Hemi V8 is a thoroughly modern engine, featuring twin spark plugs, direct ignition, and electronic throttle control, though it is a pushrod-overhead-valve design. The 5.7-liter Hemi produces 330 horsepower at 5000 rpm and 375 pound-feet of torque at 4000 rpm. Fuel economy is an EPA-rated 15/20 mpg. Note that it delivers much stronger torque yet matches the fuel economy of the 4.7-liter. Torque is that force that propels you from intersections and helps you tow trailers up long grades. Its highway fuel economy is at least partly thanks to the automatic cylinder deactivation feature, which shuts down four of the engine's eight cylinders whenever it detects a steady-state cruise condition and then reactivates them on demand. DaimlerChrysler claims this can improve fuel economy by up to 20 percent.

Both V8 engines get a heavy-duty five-speed automatic transmission with a direct fourth gear for towing. Both this transmission and the five-speed automatic that's mated to the V6 feature the Chrysler/Mercedes-Benz manual override function.

In the first quarter of calendar-year 2007, Jeep buyers will be able to choose a 3.0-liter common-rail turbo-diesel (CRD) V6, engineered by Mercedes-Benz, that produces 215 horsepower at 4000 rpm and 376 pound-feet of torque at 2000 rpm. That's as much torque as the Hemi, at half the engine speed. Towing capacity will also match the Hemi, at 7400 pounds (with 2WD); while EPA fuel economy of 19/23 mpg will yield a driving range of over 400 miles on one tank of fuel. New clean-diesel technology reduces carbon-dioxide emissions by 20 percent. The CRD will not be available in Maine, New York, Vermont, Connecticut or California.

The Grand Cherokee offers a nicer ride and better cornering than any other Jeep in history. We don't recommend flinging 4500-pound SUVs into corners, but the Grand Cherokee can encourage this sort of socially unacceptable behavior because it's easy to drive and rewarding within the limits of its tires. There seems to be a flatfooted, glued-down attitude with this Jeep. The steering is reasonably quick and accurate, and nicely weighted. A tight, 37.1-foot turning circle provides advantages off-road as well as in crowded parking lots or when making a U-turn. It feels more like a truck than do other SUVs, however.

Tow ratings are 3,500 pounds for the 3.7-liter V6, 6,500 pounds for the 4.7-liter V8, and 7,400 pounds (7,200 with 4WD) for the 5.7-liter Hemi or 3.0-liter turbo-diesel. A tow package is available for the 4.7-liter that boosts its rating to 7,200 pounds. The high-performance SRT8 is rated to tow just 3,500 pounds, however, so think twice about ordering the fast one to pull your bass boat.

Three different four-wheel-drive systems come with confusing names and complicated mechanical differences. The base-level system that comes with the V6 is called Quadra-Track I, a single-speed, full-time four-wheel-drive which uses electronic clutches in the center differential to pass torque out to the front or rear wheels as needed for best traction. It works full time, so there are no switches, no buttons, and no handles to operate. It does not offer a low-range set of gear ratios.

The more flexible Quadra-Trac II (standard with the 4.7-liter V8) also uses electronic clutches in the center differential to distribute torque in High range, but adds a locking Low range. Both systems are slightly biased, with 52 percent of the torque normally going to the rear tires and 48 percent to the front.

Quadra-Drive II, Jeep's most sophisticated system, uses electronic limited-slip differentials (ELSD) at the front, center, and rear. ELSD replaces the Vari-Lock progressive axles in the Quadra-Drive system, with quicker response to changing conditions and greater torque capacity. Available only with the Hemi last year, Quadra-Drive II is optional on all 4WD Grand Cherokees for '07.

The SRT8 flat flies and sounds terrific. Jeep claims it can thunder from 0 to 60 mph in less than 5 seconds. The SRT8 comes with a 6.1-liter Hemi V8 rated at 420 horsepower at 6200 rpm and 420 pound-feet at 4800 rpm. We loved the sound and found ourselves accelerating harder than necessary just to hear it. Throttle tip-in seems overly sensitive at times, causing us to leap off the line more abruptly than desired. At other times, it seemed slow on the uptake, but eventually we recalibrated our feet to enable smooth takeoffs from intersections.

The bigger Hemi features higher compression (10.3:1 vs. 9.6), a more aggressive cam, and higher-flow cylinder heads. It's mated to its own super-duty five-speed automatic transmission and four-wheel-drive transfer case. The latter is a hybrid unit put together from existing Jeep parts to optimize durability while minimizing weight. In normal conditions, it directs only 5 percent to 10 percent of the power to the front wheels, but can redirect as much as needed to the front wheels as needed to maintain traction. The rear axle is a Dana 44 with a tougher-than-standard ring gear and housing.

The SRT8 rides an inch lower than a standard Grand Cherokee, on specially tuned springs, shocks, bushings, and anti-roll bars. The ride is quite firm. The steering geometry is altered for its high-performance mission. Forged 20-inch wheels come shod with Goodyear W-rated four-season tires with run-flat capability. Tire dimensions are 255/45/20 in the front, and a massive 285/40/20 in the rear. The brakes are upgraded with four-piston Brembo calipers (painted gloss black, as they show through the wheels) that clamp down on 14.2-inch vented rotors up front and 13.8-inch vented rotors in the rear. Jeep claims it can stop from 60 mph in less than 125 feet. We found the brakes smooth and easy to modulate as well as effective.

The SRT8's ride is quite firm and the steering is direct and very responsive. This is what you want when making time on back roads or blazing down a lonely highway at high speeds. It makes for tight handling, good transient response and high-speed stability. We're not sure we'd want it for everyday driving, however. The SRT8 was too jouncy for our tastes on rippled freeways in Los Angeles. It does a good job of filtering out roughness, but dips and other undulations make for uncomfortable cruising. And the steering was a bit darty for casual driving. Driving an SRT8 Grand Cherokee demands almost as much attention as a Dodge Viper does. But many drivers love it. Some testers say the Grand Cherokee SRT8 is one of the best executions from Chrysler's Street and Racing Technology group.