Bigger, better built, with a far better ride and a diesel engine option at last, the Jeep Wrangler is now something more than a novelty plaything. True, it's still hardly the most practical 4x4 unless your idea of practicality is wallowing in mud but it's now no longer unpleasant to drive on road.

A bit of history first. Shortly after the surface of the earth cooled, vertebrates appeared, developed into dinosaurs and then died for reasons still not fully understood. Shortly thereafter, the Willys Jeep was built and spawned countless generations of Wrangler models, first driven by cigar-chomping beefcakes in aviator sunglasses who hadn't realised World War II had ended. Unfortunately, the brand image suffered a terrible knock in the mid Eighties when boy band Bros chose the Wrangler as their vehicle of choice.

Bear with me, we're nearly there. Realising that the Wrangler just didn't cut it in an increasingly sophisticated world, Jeep has subjected it to major surgery. The importance of this cannot be underestimated as the Wrangler is sacrosanct in Jeep circles. The challenge for Jeep was to modernise the vehicle without alienating the hardcore fans of the marque. The first step was to make sure it rode a whole lot better than the old car.

Just about the only way I can describe the ride of the old Wrangler to the uninitiated is to imagine being stricken with a rather severe case of haemorrhoids and then being superglued to a spacehopper. Perhaps that's a tad harsh but after the novelty of the old car's bouncy ride had worn off, you were left with a vehicle that could crawl through deep mud but which wasn't much good at anything else. This version at least rides in a relatively composed manner on road, with halfway acceptable refinement at borderline illegal motorway speeds and doesn't pogo horribly over bumps. Of course, it's still brilliant off road with even more aggressive approach and departure angles. Opt for the entry-level Sport or Shara trims and the car comes with clever brake lock differentials. In the two-door short wheelbase range we're looking at here, the range-topping Rubicon model gets even more specialist front and rear locking differentials.

"With a new design approach and a diesel, a whole new generation of Wrangler customers are promised."

As long as you go for this two-door variant, two engines are offered. There's a 2.8-litre 174bhp CRD diesel that's a little vocal but punchy enough to get to 60mph in 10.9s and on to 112mph. Alternatively, there's a 3.8-litre petrol engine that's fitted to the range-topping Rubicon which isn't exactly going to fly out of showrooms. Better steering, brakes and suspension give this Wrangler an element of civility.

What hasn't changed is the styling direction. Round lights, the Jeep seven-slatted grille, trapezoidal wheel arches, external door hinges and rubber bonnet catches are all present and correct. The Wrangler still looks properly butch. The difference is it's bigger this time round. The cabin is larger in all dimensions and a fold and tumble feature for the rear seat virtually doubles the available cargo capacity. For the first time in the car's history, it also gets a curved glass windscreen to reduce drag and help refinement. That's the good news.

The not so good news is that Jeep still seems intent on showing Korean manufacturers how cheap interior plastics can feel if proper corporate commitment and resolve is directed at the task. The 'Freedom Top' roof also requires an entire page of instructions to remove, which would appear to make it a once a year job. A folding soft top is offered as an aftermarket accessory. Ergonomics are still patchy, with electric window switches on the fascia and door mirrors that you need to prod the glass with your finger to adjust. Despite this, the Wrangler remains a big-hearted and likeable thing.

Two Wrangler models are now offered: the diesel-only long wheelbase four-door 'Unlimited' model or the two-door short wheelbase variant we look at here. This swb range saves you around £2,000 if you don't need the extra doors and kicks off with the 2.8-litre CRD Sport with six-speed manual gearbox. It's hard to argue with a £17,995 price tag and when this includes features such as ESP stability control with off-road mode, 16-inch aluminium wheels, a DVD-compatible stereo with six speakers, Command-Trac shift-on-the-fly four-wheel drive and remote keyless entry, it looks very competitive indeed. There's also a Sahara model offered with this engine that's pitched at £21,090 and is fitted with a rather dull-witted six-speed auto box. This model gets 18-inch wheels, body coloured exterior plastics, a special easy-clean seat fabric, tubular side steps, a full-length floor console, leather trim for the steering wheel, air conditioning and a better stereo.

Get a little too excited in the Jeep dealer and opt for the 3.8-litre petrol Rubicon model and you'll be £22,595 worse off but you'll get a car that features technical bits like a 4:1 Rock Trac part time four-wheel drive system, electronic front detachable anti roll bars, Tru-Loc front and rear axles and performance suspension. Only buy this car if you're very serious about off-roading. Otherwise you'll merely be wasting your money.

I'm going to concentrate on the 2.8-litre CRD when considering cost of ownership as the proportion of Wrangler buyers who plump for the 3.8 Rubicon is set to be vanishingly small. As far as fuel economy goes, the Wrangler does extremely well, especially when put into context. A 2.8-litre Sport will manage a combined economy figure of 28.5mpg, which isn't bad considering it has 164bhp under the bonnet. By contrast, a Land Rover Defender 2.4TD County SW has a mere 120bhp to play with yet is slightly thirstier. The Jeep is nearly £5,000 cheaper too when equipment levels are taken into consideration.

Depreciation is a tougher one to finger but the fact that Wranglers tend to have very long lifespans between major revisions helps prop up residual values significantly. As for insurance, the Wrangler again scores relatively highly compared to the Defender, with some insurance companies refusing to quote on the Land Rover due to its poor security provision while the Jeep scores an excellent 10E rating. Emissions aren't stellar on either engine, every Wrangler being rated above 250g/km.

Jeep had to walk a very precarious tightrope with the latest Wrangler. On the one hand, they needed to make it safer, more civilised and more relevant to the majority of compact 4x4 buyers while at the same time not alienating those customers who loved the model's rough, tough go-anywhere ability. On the basis of a drive both on and off road, I'd have to say that Jeep has succeeded.

It's not perfect though. Some parts are clearly built down to an admittedly very low price and the ride quality, while notably better than before, isn't exactly conducive to big mileages. Given the very tough brief, though, the latest Wrangler is a commendable effort and the installation of a rugged 2.8-litre diesel with an automatic gearbox will bring a whole new generation of Wrangler customers on board.