I have a 1999 Vanden Plas. In Florida, during early morning drives -before 9:00am, turning on the AC results in the windshield freezing and I have to turn on the wiper to see or turn off the AC. This, no matter how low the fan setting or redirection of the AC to the floor. A friend has the same model and the same experience. He has to drive with his window down until late morning.

 

Well, it can't freeze unless the air temperature is 0C/32F.Fogging I can see. If fogging is the issue it's usually caused by a small leak in the heater core which is adding moisture into the HVAC ducts which condenses on the windshield. I don't know if the Jaguar default is to direct air to the windshield (it is on US made cars) if the vacuum to the system controls become disconnected. It seems to me that you may have 2 issues. Just realized you are referring to fogging on the outside caused by moist air condensing on a cooler surface. That's normal.

 

By the way, if you have a 1999 XJ then it's an X308 and you're posting in the wrong subforum; this one is for the 2003-9 XJ (X350/358)

Link to X308 forum