The Jeep Wrangler Unlimited or Jeep LJ is a name for the Unlimited version of the TJ. It was only made for the 2005 and 2006 model years. What makes it different is the length. There is an extra 10 inches of length which creates a longer wheel base. You will mostly notice the length when looking at the distance from the rear fender and the front door. The standard Unlimited comes with a limited slip rear Dana 44 axle with 3.73 gearing. This allows for better towing capacity. Off road enthusiasts like this for the beefier rear axle that can withstand more abuse than the standard Dana 35. It also has more locker options than the Dana 35 and can handle a much larger tire size due to a larger in diameter axle shaft. Another advantage of the extra 10 inches would be the greater amount of cargo room. There are some disadvantages as well from an off-roading perspective. The rear approach angle is compromised a bit with the rear axle positioned a few inches forward from the back of the Jeep when comparing with the standard TJ version of the Wrangler. The longer wheel base introduces an issue with rubbing more often on the skid plates that protect the transfer case and the transmission. A larger lift is required to achieve the same angle clearance as the standard TJ.
The Wrangler Unlimited has become a desirable model for those that want the longer wheelbase and plan on lifting it and don't want to modify the standard Wrangler and extend the wheelbase themselves. The longer wheelbase creates more stability and a stronger base for towing. The Jeep LJ can tow a significantly larger amount than the Standard TJ.