The upstream 02 sensor constantly monitors the air-fuel mixture and the downstream 02 sensor makes sure the catalytic converter is working properly. When the upstream sensor goes bad, it causes poor performance and a dramatic loss of fuel economy. Nothing really happens performance-wise if the downstream 02 sensor goes bad. Either going bad will cause the Check Engine light to illuminate.
Have you had anyone read your engine's diagnostic codes? You might be able to read your own codes with the following procedure but understand that this ability was removed in late-model 1998 TJs and did not reappear until sometime after 2000.
Try this and see if you can get your engine to display any stored diagnostic codes... without starting the engine, turn the ignition key on-off-on three times within five seconds and after leaving the key in the 'on' position, wait. It can take 5-10 seconds so be patient at this stage. If the codes are going to display, they will start appearing in the odometer, together with the Check Engine light blinking as the codes appear. If it works, you will always at least get a '55' code which doesn't indicate anything except that it worked.
I'm thinking maybe a bad crankshaft position sensor but it's hard to tell at this point.