My mate wants to sell me his 1999 cherokee, he has lost his keys, I want to know what has to be done to get a new key, someone told me the computer needs to be changed along with a new coded key?

Take the key with proof of vehicle ownership to your local dealer who will gladly set the codes. Or if you have a premium car recovery roadside assistance package, they will come to where you live and preform the deed.

P1686 is a SKIM (Sentry Key Immobilizer Module) no signal code. The keys have tiny chips in them that have to match the SKIM module for that vehicle, if they dont match then the engine will stop running after a few seconds. This is to keep theives from making a key and driving away with you vehicle.
First of all, do you have 2 keys? If so try the other one, if it works, then the other sentry key (the one that didn't work before) has bit the dust. If both do not work and both seem to have same symptoms, then it is quite possibly the module under the sterering wheel cover attached to back of ignition switch which reads the sentry key and if it gets signal from sentry key, then it sends a signal to pcm allowing start up to complete with no shutdown. If this unit is bad, unfortunuately just replacing it is no help, because after replacement a DEALER must then program both the unit and your keys. Make sure you give the dealer both keys, as both have to be reprogrammed to the new unit, if only one is done, the other will not work.

not sure if that key has the chip but the price is correct. get your vin number, take it to a jeep dealer they should be able to tell you about the chip

only the dealer can repair this, the Body control computer must be programmed to the new lock cylinder, there is no way around this.

Chrysler uses a system called "Sentry Key", it has to make a connection with the transponder in your key. I'm willing to bet you have a gray rubber key?

The key reader is usually is located on the ignition spindle or in the steering wheel shaft.

Once you remove it the vehicle will not function, re-wiring can be done to bypass but you're looking at alot of work. My suggestion is to take the vehicle to a dealer for this! Tow it over there if you have to.

go to nearest dealer and will have to purchase new fuel cap and they will be able to re-tumble new lock to your key and remove old cap

The key has a black rubber head and, is a "vats" security key; your dealer can sell you the correct one.

You should be able to get a new key with the VIN (the set of letters and numbers usually in the driver side end of the dashboard near the windscreen).

The Dealer should be able to give you a new key by using the VIN number.  I have done this before myself.

The 1st key cost more because they have to reset the cars security system to make it recognize the new key, once that is done is easy to do the 2nd key, thus less money for the second key.