I have just bought a very rusty little truck, I'm sure every thing I need to know can be located with in diffrent threads so the hope is every one will have some patience with my questions and share the vast knowledge out there. My plan is to turn this truck into a daily driver with the ability to go off road.
   So the motor is shot and half missing, I have been given a complete VW Jetta/1.6 TD that should take care it, as for the axles, trans and transfer case that is still an unknown. I have been told that 88.5 413 axles are the same width with disc brakes and are allot stronger as I do want to run a larger tire but keep the ability to drop the box sides, I was thinking of a tranny up grade to a 5 speed and have no idea on the transfer case.
  Any feed back on the tranny and case would be welcome, I'm hoping to start the metal work this winter but gather as much as possible over time (bargain hunting) 

The SJ-413 axles are actually wider by 3", so you will have to weld on new spring pads.  The t-case is 10% lower in high and low range then the stock SJ-413 one, so I would leave it alone.

I would go with a Samurai 5-speed and a 1.6L out of a Tracker, some 2" lift springs from OME and SJ-413/Samurai axles with 30" tires.  That gives you a nice little rig that will go just about anywhere.

Drone Pretty much covered it...but I would go with Spring over axle conversion (SpOA) on the sami axles.

For a DD rig I like keeping them lower then the SPOA setup on 31" tires.  That being said, I ran my SJ-410 with SPOA and 33x12.5 without issues and loved it.  Just needed some heavy fender trimming. 

will the 410 axles be strong enough to handle a 1.6td, I really don't want to lose the ability to drop the sides of the box by having the wheels stick out too far

If you keep your tires small they should work, but I would use it for light off-roading only.  If you don't install a locker your axles will last a lot longer then if your locked up front and rear. 

I have a 82 SJ410 with a spoa (4.75" of lift), had welded spider gears (broke), and a Sami tcase with 6.5:1's and 33x12.5x15 TSL's, and I broke a front shaft, and now my rear diff is shot, but I did drive the hell out of it. If your  just doing light trails with your SJ410K I think you would be ok with 33" tires on your SJ diffs if you don't beat on them, but with a diesel it would be iffy , only problem I have is high range isn't low anuff for the 1 liter motor with the 6.5:1 gears.

only problem I have is high range isn't low anuff for the 1 liter motor with the 6.5:1 gears.

Throw some 5.12 gears in Sammy axles as well, then you'll be able to run around without to much of an issue.  But it does limit your top speed to 50.