When it comes to four-wheel-drive sport-utility vehicles, Jeep and Land Rover have a reputation and a cult-like following that places them far above the rest. The British-made Land Rover and the American-built Jeep are, in fact, the crown jewels of the sport-utility business. So far this year, Jeep and Land Rover vehicles are racking up record sales worldwide. Led by its Land Rover division, Great Britain's Rover Group is one of the hottest European automakers this year, with sales up a healthy 14.9 percent over last year. With more than 40,000 Grand Cherokees sold already this year - compared with 24,000 for the same time last year - Jeep sales are surging. Until now, though, the two greatest names in the business have not really competed against each other. Since 1986, Land Rover has concentrated most of its U.S. marketing efforts on selling the Range Rover, a $50,000 high-tech luxury sport-utility vehicle. But the introduction this month of the new Discovery likely will put the Jeep Grand Cherokee and the Land Rover on many of the same shopping lists. The Discovery and the Jeep Grand Cherokee are the only mid-size sport-utility vehicles you can buy with a V-8 engine. Both vehicles are about the same size. They're priced within a few thousand dollars of each other, and both come with class-leading safety features. Land Rover, which has a reputation of building boxy, utilitarian, jungle-taming vehicles, is trying to move into the mainstream with the four-door Discovery. This is a family-oriented, sport-utility vehicle that comes with standard anti-lock brakes and beefed up side-impact protection. It's also the only sport-utility that you can buy today with dual air bags. One of the remarkable things about the Land Rover Discovery is its price. Discovery offers more value for the dollar than any other imported sport-utility. You can't get dual air bags or a V-8 in any Japanese sport-utility, but you can easily pay the same amount or more for a Toyota Land Cruiser or an Isuzu Trooper. Even though both the Jeep and the Land Rover appear similar on paper when you compare specifications and prices, you notice major differences when you drive them. Both vehicles are being pitched as macho, off-road machines, but Land Rover and Jeep know that's not how most buyers will use them. Instead, sport-utilities have become the station wagons of the '90s - family vehicles that buyers want packed with user-friendly features. We test-drove both vehicles on the road and off and found that the Land Rover offers the kind of soft, relaxed ride you would expect to find in a luxury car. The Jeep Grand Cherokee performs more like a muscle car or a fast sports sedan, and it delivers the complete package - the style, the room, the utility and, more importantly, the brute horsepower to carry you safely through the worst terrain you are ever likely to find in Central Florida. OFF-ROAD PE RFORMANCE The Discovery is powered by the durable and well-proven aluminum V-8, a lightweight engine that Rover bought from General Motors in the mid-1960s. Many improvements have been made over the years. This quiet, smooth-running 3.9-literV-8 develops 182-horsepower and 232 pounds-feet of torque. When it comes to off-road or towing performance, torque - a measurement of the force that rotates the wheels - is actually more important than horsepower. The higher the torque, the better the vehicle will be at pulling heavy loads. As with other Land Rovers, the Discovery seems best suited for slow-going over rough terrain, rather than blasting through obstacles. A two-speed transfer case lets you adjust traction. With it locked in low range, the Discovery has ample power to churn through thick sand, climb over small hills and through shallow ditches. Its high range could be used on slippery roads. Initially, I was a bit disappointed in the Land Rover's ac eleration on and off the road. The 4,300-pound vehicle is not particularly quick; the engine just doesn't feel terribly eager to get the Discovery moving from a stop. Our test Discovery, painted a dark British Racing Green, came outfitted with a four-speed automatic, as did the Jeep. For the Discovery, however, this may not be the ideal gearbox for serious off-road drivers. The Land Rover struggled and strained when climbing a steep sand-covered hill. Usually, a manual transmission does a more efficient job of sending the power to the wheels. The transmission in the Discovery seemed to shift up and down through the gears with a bit more authority than the Jeep's. However, the Jeep's transfer case is easier to shift than the Land Rover's, which required quite a few stabs of the stubby lever to lock in gear for off-road driving. The Grand Cherokee's thumping 5.2-liter V-8, on the other hand, makes the Jeep a fast and fun-to-drive vehicle. In the woods or on the street, there's plenty of power on tap. I've previously tested the Grand Cherokee with the standard six-cylinder, which is an excellent engine, but it's the 220-horsepower V-8 that makes the Jeep the best 4 X 4 by far. Where the Rover struggled, the Jeep simply flew, kicking up dirt and refusing to be deterred. Such an awesome show of force is impressive. The Jeep's engine develops 280 pounds-feet of torque. ON-ROAD PERFORMANCE Even though the Discovery is not as quick and responsive as the Jeep, it does deliver reasonable acceleration at about 30 mph or so. Once moving at that speed, performance is pleasing, and passing slower traffic at between 40 and 55 mph is generally quick and effortless. What the Rover engine lacks in tire-spinning performance, it makes up for in refinement. This is a great engine that has proved to be relatively trouble-free over the years. Also, the aluminum V-8 sounds nice; it makes a soft whistling or purring sound andgives the Rover an expensive feel. On the road, the Grand Cherokee performs like a fast mid-size sports sedan. Response is crisp, especially from a stop. The Jeep leaps to 60 mph quickly. In fact, it is something of a hot rod among sport-utility vehicles. The Jeep and the Rover come standard with five-speed manual transmissions. However, our test vehicles, provided by Land Rover of North America and by the Jeep division of Chrysler, were outfitted with automatics - the transmission of choice for most buyers. The automatic adds $1,100 to the Rover's bottom line. In the Jeep, the automatic pumps up the price by $897. Performance, however, cannot be judged by raw speed alone. The Land Rover has at least one huge advantage over the Jeep: it can tow a maximum of 7,700 pounds - 1,200 pounds more than the Jeep, according to manufacturers' specifications. Even though the Jeep has a considerably larger engine than the Rover, it delivers better fuel economy. The Jeep' s V-8 is EPA rated at 14 mpg in the city and 18 mpg on the highway; the Rover comes in at 13 mpg in the city and 16 mpg on the highway. OFF-ROAD HANDLING Thanks to such vehicles as the boxy Land Rover Defender series, the marque has an image of providing a super-stiff, bone-cracking ride. The Discovery, however, is a different kind of Land Rover. In fact, it has more in common with the luxurious Range Rover than it does its more spartan desert-crossing stablemates. Just like the original Range Rover, the Discovery is outfitted with long-travel coil springs that allow the wheels generous up-and-down movement. This lets the suspension system absorb the brunt of the forces generated by bad terrain. The Discovery dips gently when you drive on rough terrain off the road. Discovery - which weighs about 300 pounds more than the Jeep - feels exceptionally stable and easy to control. And it doestake some extra effort to drive compared with the Grand Che okee. The Jeep's steering is lighter and quicker, giving it more of an agile and easier to drive feeling when going fast on and off the road. You'll also notice that the Jeep's firmer suspension system is just as capable - if not more so - than the Land Rover's. The Jeep's interior is well-insulated from the action of the suspension system. And one trait I noticed in a previous test of the Grand Cherokee - a looseness in the steering wheel - was not felt in this week's test vehicle. ON-ROAD HANDLING The Discovery offers a luxury carlike ride, one that eliminates road noise and softens most minor bumps. In fact, the Discovery feels much like the original short-wheelbase Range Rover. And there's a good reason for that. Underneath the Discovery's body is a slightly modified Range Rover steel frame and coil spring suspension. The body leans gently - and very slightly - as you turn into a curve. The Land Rover's four-wheel disc brakes are strong. The anti-lock system keeps the vehicle straight in a panic stop. The Grand Cherokee is light, agile and nimble, and it takes less effort to drive. For instance, the steering wheel in the Jeep is far easier to turn than it is in the Rover. Highway driving never was a strong point of the original Range Rover. And the Discovery, though improved greatly, still shares some of the Range Rover's traits. There's some play in the steering system, so you find that you must make small corrections. Even though the vehicles are very close in overall width and length, the Jeep is far more stable when cruising at highway speeds. FIT AND FINISH The Discovery has been on the market in the rest of the world since 1991. So why hasn't it been offered here? One reason is because Land Rover engineers decided to build a completely new interior for the North American version. The Discovery is the only sport-utility vehicle you can buy at this time that offers both driver and passenger air bags. The Grand Cherokee has only a driver's air bag. The Land Rover's interior is luxurious, functional and smartly designed. And this may be a first for a British vehicle: The Discovery even has cup holders. Up front, our test Discovery was outfitted with a set of firm, stylish leather bucket seats. There's a bench seat in the rear and two foldaway jump seats in the tailgate area, a $975 option. The Discovery can seat up to seven; the Cherokee can hold five. After driving both vehicles over a week, I've decided that the Grand Cherokee Laredo really deserves a better set of seats, which are available in the more expensive Limited model. The synthetic-looking cloth material in the Laredo - the mid-level model of the Grand Cherokee line -looks somewhat chintzy, and the padding underneath doesn't really offer much support. Rear-seat passengers are given first class appointments in the Discovery and the Jeep. Both vehicles offer gener ous rear head and leg room. The reason our test Land Rover vehicle cost so much is because it came loaded with every option available. Some of the price-bloating options seemed unnecessary. Thelist includes front and rear sunroofs for $1,600. I think just one sunroof up front would do nicely. It also had a front and rear air-conditioning system, which added another $800. Again, one air conditioner should be fine. The placement of the spare tire in each vehicle makes for separate problems. In the Jeep, the spare swallows valuable cargo room, mounted as it is behind the rear seats. In the Land Rover, the spare is mounted outside the vehicle on the tailgate, and it partially blocks rear vision. As far as equipment goes, the Land Rover is a bit more sophisticated in some areas. For instance, the air-conditioning system has separate temperature controls for driver and passenger, headlight washers and rear fog lights, all excellent accessories. The gauges i the Rover - lifted from the European Rover 827 luxury sedan - have a classier look than the gauges in the Jeep. On both vehicles the cruise control switches are located on the steering wheel for convenience. Both offered along list of power accessories, though the Jeep came with power seats and the Land Rover did not. So, what's the bottom line? If you want a mid-size sport-utility vehicle with V-8,you are either going to end up at the Jeep dealer or the Land Rover dealer because Ford, General Motors and the Japanese don't offer V-8 powered mid-size sport-utility vehicles. The decision on which to buy might be easier if you consider your driving style and how you'll most likely use the vehicle. If you want a sport-utility vehicle that drives like a fast sports sedan, you won't be disappointed in the Grand Cherokee Laredo V-8. However, if you want to drive a sport-utility vehicle that feels more like a smooth, relaxed luxury car, that can hold up to seven people and that has a classy, European interior, then the Land Rover Discovery is the logical choice. Specifications: 1994 Land Rover Discovery Four-wheel drive system: Two-speed transfer gearbox with manually locking center differential, permanent four-wheel drive. Suspension: Long-travel single-rate front and dual-rate rear coil springs; front and rear dual-acting hydraulic shocks and front and rear anti-sway bars. Steering: Power-assisted worm and roller; 39.4-foot turning radius. Brakes: Power-assisted four-wheel disc brakes with four-wheel all-terrain ABS. Tires and wheels: 16-inch Michelin radials; alloy wheels. Wheelbase: 100 inches. Overall length: 178.7 inches. Overall width: 70.6 inches. Front track: 58.5 inches. Overall height: 77.4 inches. Overallweight: 4,379 pounds. Ground clearance: 14.4 inches. Maximum angle of approach: 33 degrees. Maximum angle of departure: 24 degrees. Maximum towing capacity: 7,700 pounds. Headroom: front, 37.4 inches; rear, 39.2 inches. Legroom: front, 38.5 inches; rear, 36.3 inches. Fuel tank: 23.4gallons. Warranty: 3-year, 42,000-mile limited protection; 6-year unlimited mileage rust protection; 24-hour Land Rover Road Recovery service.