X2 Jeff's lift kit. If money is an issue, you won't go wrong with Jeff's parts. Install a new pair of struts along with new longer rear shocks and you will be surprised how much better your truck rides and handles with the new components, even with 2" of additional height. These will set you back about another $200. After about 50-60K the original stock struts and shocks are tired and smoked. New ones will get the "spring" back into you truck's ride.
If you have $350 laying around for a set of OME springs, and $70 for Jeff's strut spacer, you'll enjoy a little smoother ride.
If you have $750 to invest, add the OME struts to their springs and gain the additional wheel travel for your front end. The OME set-up is probably as good as these trucks can get for an actual 1.5 inches of additional front wheel travel. This is the "more better" set-up. The stock sway bar will still bolt right back up if you drive on road more than off-road as well.
In either case, a set of Monroe shocks from a Ford Crown Victoria (90ish model) in the back will handle the rear end very smoothly and won't set you back more than $40 for a set. If you go with the Crown Vic model shocks, you will either have to reuse the metal sleeve bushing from the bottom of the factory shocks
(cut the metal holding the bushing to remove the bushing, then cut the sleeve out with a razor) OR buy a set of poly bushings to snug up the bolt in the shock sleeve.