I have 3rd gen 16" wheels (from a 2002 Limited) on my 2003 Limited, as seen here:
Imgur: The magic of the Internet
No issues with the brakes at all. Only issue I have is a bit of rubbing when I turn sharp, but that's because I put 265/75/R16 tires on. Would be easy to fix the rubbing with a bit of chopping if I cared to do so.