The problem is that the type of 4x4 system in a Wrangler is not designed to be used on a dry paved street. As opposed to a full-time or all-wheel drive system that can be left engaged 100% of the time no matter what the road surface is, the Wrangler's 4x4 system is strictly
a part-time 4x4 design that is meant for use ONLY when on a slippery surface... which means primarily offroad.
The Wrangler's "part-time" 4x4 system mechanically locks
the front and rear axles together. As such, the front tires are forced to rotate at the exact same RPMs as the rear tires. What happens during a turn? The front tires must rotate faster through the turn than the rear tires do. Because the Wrangler's part-time 4x4 system prevents that from happening, the front and rear tires are fighting each other through the turn as they try to rotate at different speeds but are prevented from doing so. This is why your steering wheel was jerking back and forth, the front and rear tires were fighting each other as they were prevented from rotating at the different RPMs they needed to turn at.
So the bucking and steering problems you experienced are normal if you try to drive in 4x4 on a paved street. Only shift into 4x4 when you're offroad or if the streets are completely
covered in snow, ice, or similar.
No, it's not even a good idea to shift into 4x4 when it's raining as even then, the streets usually have enough traction that you'll still get the bucking and steering issues you experienced. Using 4x4 when on a high traction surface stresses the Wrangler's drivetrain so avoid shifting into 4x4 except in low traction situations.
You can also read a FAQ for more information on this subject that I wrote at http://www.jeepforum.com/forum/showthread.php?t=130169
which goes into a bit more depth.