Is the Teraflex system you're talking about the one that just disconnects the sway bar? Doesn't really matter either way, it should work with any lift provided the actual sway bar links are the correct height (or can be made to be). You can get the Currie/Savvy lift with an Anti-Rock which is something you may want to look into.
As far as long arm vs short arm, that's a debate you'll probably have better luck with if you just search a bit. Most threads talking about it just get overrun with useless arguing without giving much good detail. In short, I don't know of any bolt on long arm kit I would bother running. Between the clearance and geometry problems they create the only way I'd use anything longer than short arms is if I was building the system myself.
The 4" kit from Savvy/Currie is a very good system; if you're looking for something bolt-on that rides great and will hold up to some serious use and abuse, you can't get much better than that lift. Gerald over at Savvy is great to work with.
Currie Johnny Joints Suspension TJ LJ
or with disconnects instead of the Anti-Rock:
Currie Johnny Joints Suspension TJ LJ antirock