These two words can be confusing. Here’s a good rule of thumb:

Use “that” whenever the identity “that” is replacing is known to the speaker. Examples:

I will read the book that is written by my favorite author. (not: “which is written..”)

All that I can see from here is beautiful.

She didn’t even apologize, and that is why I am angry. (not: “apologize, which is why…”)

Use “which” whenever the speaker does not know what “which” is. Examples:

Which route will we take to get there?

I do not know which [one] is the better car.

http://www.englishforums.com/English/DifferenceBetween/cqzx/Post.htm

Which is more formal.