If you can do your own work, you have a good work space, good tools, and the body/undercarriage is in good shape and not rotting? I almost always vote fix.
My XLT had the following major things happen to it:
-Ate a torque converter and band at 140k (rebuilt trans)
-Ate a SOHC motor (timing chains) at 202k (replaced with late-model Ranger motor)
-Rear ended by a semi (rebuilt back of truck, replaced hatch)
Lots of people would've junked it 3x over, but the body has no rot, just about everything is in great mechanical condition, and I know the condition of every system in the vehicle intimately. I keep logs, so I know how many miles each part I've replaced has on it--makes pre-emptively replacing parts as part of preventative maintenance easy. Also gives me a good idea of what is likely to fail next, so I can keep an eye on it.
As a result, I've got a 302k mi trucklet that I wouldn't hesitate to drive cross country tomorrow. If I junked it and bought something else for $2500-3000, I'd be inheriting a big question mark of someone else's problems. In terms of peace of mind, I'd only feel comfortable in a new/pretty new (~3 year old) vehicle or something that I've gone through and 'restored' myself. That's why I like to buy older but low mileage vehicles on the cheap, and sink a bunch of money in parts into them. For $3000ish total investment, you've got a reliable Explorer with new suspension, steering, brakes, exhaust, etc.
Now if you have to work in a driveway in inclement weather, your tools suck, and you can't fix lunch? Drive it until the wheels fall off, then junk it and buy another for $500---and repeat.
