Can anyone explain to me what axle ratio is and why 3.73 is apparently "better"?

The 3.73 refers to the final drive ratio of the rear axle gears, the drive shaft turns 3.73 turns to rotate the rear tire once. 3.73 is probably considered average for today's SUV with higher numbers being a lower ratio and lower numbers being a higher ratio. Many early Jeeps had ratios above 4, to get more torgue from the engine at low vehicle speed, but at the sacrifice of higher engine speeds on the highway. 3.73 is a compromise.

What axle ratio is "better" is highly relative. It depends on what size tires you are running, and if your wanting more performance, or more economy. However, even at $3 per gallon, it's going to take a lot of gas to ever pay for a gear swap. If you go to taller tires, or get more power off the line, you would want to go to 4.10 gears which are the only lower gears available for the KJ. The stock 3.73 gears with 29" tires are on the side of better gas milage. 3.91 gears (not actually available for D30A front diff) would be right in the middle. And 4.11 gears (same thing as 4.10 gears) would be on the more power side. This chart will help.

http://www.4lo.com/calc/geartable.htm

_________________
June 2001 Liberty Limited 4X4
Frankenlift II Premium, Al's Upper Arms, 245/75R16 C Silent Armors on Moabs, RL Skink Super Sliders, Rear DTT, Riddler Diff Cover, Fastman Throttle Body, Profinish-Proglass Hood, Borla Dual Outlet Exhaust, TransGo Reprogramming Kit, APS Stall Converter, 4.10 Gears, B&G Chrysler PCM, Lots of Line-X, etc...

http://www.4lo.com/calc/geartable.htm

Some info...not gospel but shows rpm vs tire size vs gear ratio

_________________
Founder of L.O.S.T.
2006 CRD Sport
Mods: GDE Hot Tune w/ 364#@2000rpm/Air Box /3" Str8 Exhaust/ASFIR Alum Skids/245-75R-16 Cooper STT PRO/OME LIFT w/Clevis & 4 Spring Isos/AirTabs/Rigid 10" S2 LED/4xGuard Ctr Matrix Bumper
Drag Strip:Reac=.1078_60ft=2.224_1/8=10.39@64.8mph_1/4+16.46@80.8mph

3.71:1 means the pinion hear turns 3.7 times per one revolution of the ring gear.

_________________
LOST KJ'S
Where are you going???
Current Jeep: 2004 Jeep Liberty
-Atlantic Blue
-Air Ride Rear Suspension ; OME/Rustys Lift ; Powertrax Locker ; Moog Lower Ball-Joints ; 245/70/16 Yokohama Geolander A/T-S's on MOABS ; Flowmaster 50 SUV
Lost #007082
http://www.cardomain.com/id/jeepjeepster