Around here (SW Missouri) if you offroad at all you WILL have fine scratches down the side of the truck. Funny, most of the time I see a Jeep set up like this it is just as shiny as this one (well, maybe a little door ding from the mall.) Scratches are first thing I look for - a badge of honor (or the sign of a fool!).
A stock 3rd gen is pretty capable. A few weeks back I took a couple of guys through a pretty tough trail in the national forest. One was a stock 99 with street tires. He didn't have any problems except ground clearance in a few spots. I believe he did have a locker.