I read on another forum that a dropped pitman arm should never be used with this type of relocation bracket, so I called Skyjacker to get their opinion. Their reply was that I should definitely have the dropped arm, especially with 4" of lift.
One of my installers has an XJ with a 6" lift under it. He gave me his stock arm to try on my TJ. What a difference it made! Bumpsteer is completely gone and it no longer dives to the right when running up the RPMs and shifting hard. Overall, the steering feels tighter and it doesn't wander on the freeway like it used to. The tie rod is now much closer to level, and the rig actually moves when the steering wheel is turned.
I'd say the rule of thumb holds true. If you use a relocation bracket (regardless of which one), use the dropped pitman arm.