Simon,
   You need to step back a bit and educate yourself on the XJS before you
buy one. The XJS was introduced in 1975 with a V-12 5.3 litre engine.  It
carried this engine as it's only power plant until the introduction of the
AJ6 3.6 litre power plant in 1983  model year 1984.  US introduction 1986.
It continued with this combination until the V-12 was upgraded to a 6.0
litre (not sure of the year) and the 3.6 was upgraded to a 4.0 in 1990.  The
4.2 litre XK engine was never put into the XJS as part of Jaguar's
production line.  If the XJS you are looking to buy has a 4.2 XK engine than
it is a replacement engine.  The 4.2, by the way,  is a great engine and a
straight 6 cylinder.  The V-8 (other than the Daimler 250 of the 1960s)  was
not introduced until 1998 by Jaguar  -- long after the XJS was no longer
produced.
You might want to go to http://www.jag-lovers.org/brochures/index.html?ql
and read the original brochures on these cars so you know what you are
looking for.

Hope this helps.

Webserve

Webserve is absolutely correct. The engine in your XJS would be non
original. Having said that apart from having 6 cylinders missing from the
proper engine - The 4.2 is a damn fine engine.

The big issue is going to be the bodywork. The first place to go is behind
the wheelarches where those big tyres throw up stones. The front is
protected by a cover but this usually just traps the mud. If you see any
sign of rust at the bottom of the front wings where it meets the sill then
you can guarantee that you will need to do some welding to the metalwork
behind - Not insurmountable but just be prepared.

Next open the bonnet and check where the shock absorbers come through the
body - Another common rust place.

Have a good look underneath and the jacking points. Again, any sign of rust
means that you will need your welder out.

Next, jack the car up and check the front suspension mountings by looking
for any play in the wheels or any fraying of the mounting rubbers. The top
ones are easy to change (although they are more expensive). To replace the
lower bushes means that you will need to drop the subframe which is really
fun !!!

Do the same with the rear suspension, but there are no real issues with cost
or difficulty to replace here. A good trick I learnt is to get an assistant
to sit with the engine running and their foot on the brake. Put the car in R
and see if the rear wheels twist. Then put in drive and see if the axle
twists again.

As far as MPG is concerned - If you need to ask then you cant afford !!!

Enjoy

Stu