that, which

These relative pronouns are not interchangeable and writers should not imagine that "which" is the literary form of "that". Use "that" in so-called restricted clauses.

The house that Jack built is still standing.

Use "which" (and commas) for unrestricted clauses.

The house, which Jack built, is still standing.

The first usage here is restricted to one particular house; the second is not restricted. In the second example, the clause between the commas simply adds extra information that is not essential to the sentence.

For further explanation, see http://ccc.commnet.edu/grammar/notorious/that.htm