Jeep Cherokee would meet all of your needs IMO. Grand Cherokee would work as well, but they aren't as reliable IMO.
1.) Must be able to do nearly everything off road comfortably (mud, sand, prerunning, water, and rocks. (but nothing too extreme))...XJ's can be modified mild to wild
2.) I must be able to sleep inside of it with gear. (I'm about average size)...I've got a buddy that's at least 6', he sleeps in his 2dr XJ
3.) It must get fairly decent milage (+-15 mpg city)...my '87 stocker with 200k on the clock still got 20MPG on the highway
4.) It must be below $10,000 USD to purchase...with change to spare
5.) It must be reliable...XJ's are damn near bulletproof for "normal" use
6.) It must have room for 4 people and gear....Not a problem as long as everyone REALLY likes each other, heheh.
7.) It must be safe...not sure on the crash ratings
8.) It needs to be cheap to maintain and modify....parts are cheap and available anywhere, huge aftermarket support
9.) It must not be so nice that I would be afraid to get scratches etc. on it....It's a Jeep, not that pretty to begin with.
10.) It must be acceptable to drive on the highway....not sure what that means, XJ can blend with all the other soccer mom SUV's out there just fine


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