Recently replace the serp. and PS pump. Service engine soon light is on and something is squeaking badly.

The part is not that expensive. http://www.autopartswarehouse.com/shop_years/jeep-cherokee-power-steering-pump-pulley-1997.html
The thing is those pulleys don't come attached to the pump. They are separate and have to be installed and removed with a puller. I would suggest that you look on youtube for video and see what you can find. Also those don't just break, it may be something that was done when your friend worked on it or the pump is going bad.

Use something long, like a screwdriver, as a stethiscope on each item when running, you should be able to hear the noise.

As soon as the car hits the mark of 60Kmiles, the owner has to make the decision. To keep it or get rid of it. If you decide to keep it, than prepare for more expensive tune Ups, or Preventive and Scheduled Maintenance Services. The squeaking noise means it is the time to replace the serpentine belt. It cost $30 and can be done by owner in 5 minutes, but from now you have to save some money, because between 60K and 90K the timing belt has to be replaced too with a new one. It is not the belt only, there is a kit with belt tensioners that cost $290 parts only.
For more information please read my tip:
When should i change the timing belt on my car?
http://www.fixya.com/cars/r6481199-when_change_timing_belt_car
After the timing belt most of the car dealers recomment to flush and change all fluids with the new one. Transmission oil and filter, coolant, brake fluid and more ....

You need to scan for the fault codes to know what area the problem is in.

Hello. The ABS [anti-lock brake system], traction control and service engine soon light are all interconnected. The ABS and traction control each depend on sensitive sensors to send a signal to your car's computer that there is a problem. The problem unfortunately is that the sensors themselves are bad. If your brakes still pump themselves when you stop fast, for example, then your ABS system is still working but one of your sensors is sending a signal anyways.
To check everything out you can take your car to many auto parts stores, or most recently AAMCO transmission stores, where they will scan your computer for free. Once the scan is done you will know exactly why the service engine soon light is on.
In the meantime, you do not need to worry about your brakes because all the ABS system does is pump them for you. You can still pump them yourself, like folks did for years before ABS came along. Same is true with the traction control. As long as you do not drive wrecklessly you need not worry.
So to summarize, call around to auto parts stores, or AAMCO to get a free scan. Once you have those results you can decide on how to proceed.
Here is a great link if you want more information. http://www.aamco.com/Check_Engine_light_on-FREE_Check.asp
Regards, Joe PS kindly rate my answer. Thank you.

for 3800 eng remove serp belt disconnect pressure & return line two 13mm head bolts through ps pulley. pump will come out through top of engine but have to rotate to pull up good luck

replace the 02 sensor and the light will go off.

take off your serp-belt and spin your water pump, alternator, idler pully and see what squeaks or feels rough. your water pump bearings may be bad. the only thing you can do is change it. dont forget to change your thermostat and antifreeze. FYI your antifreeze is made with lubricants in it for your water pump bearings.

Sounds like the wheel bearing... try jacking the car up and moving the rotor forward or backward. if you hear a grinding noise, or if the rotor moves sideways... like rock it.. then its definately that. I have the same problem with the service engine soon light... try removing the positive on the battery then waiting 30 seconds and putting back on. should reset the cpu.

The squeak you hear is because coolant is leaking onto the belt making it slip and that is the squeak you hear. The reason your heater isn't working is because the coolant is low enough that it isn't able to circulate through the heater core and heat your car. If you are losing a gallon of coolant a week, I would guess you either have a coolant hose with a leak or your water pump is going bad and starting to leak. It could be getting weak which also would cause you to not have heat. I would get it fixed soon before the pump shells out on you and your engine overheats which could cause more damage to the engine.

Good luck