Ok i see two issues: a 4x4 and 35" tall tires! With that set up I would do the gears, only down fall is to have to do 2 axles, double the cost! But if you have the cash that's what I would do first and then maybe a stall converter.
Think with those tires and gears a camshaft won't really help out, may run worse around town/bottom end. If you are just looking for this low end street performance kick do the gears.
If and when you go bigger with a cam you usually need a converter and gears to get it "up" quicker into that cams powerband. That's why when you read in the cam manufacturers footnotes some say need gears, stall, headers cause you want to get the motor RPM's up quick into where the cam makes power. Not that a 260 camshaft is all that crazy, but don't think you'll see as much as a result with gears and coverter. Goood luck and go with the gears.