This has already been answered a few places if you search for it but I'll explain again here:
"which" introduces non-essential information. A "which" clause, which will always be set off by commas in standard American English, can be removed from the sentence without changing the meaning of that sentence. For example:
"The GMAT, which I am taking next month, is a very hard test." This sentence is "The GMAT is hard"; the "which" clause is just some extra descriptive info.
"that" introduces essential information, without which the sentence would be completely different. For example:
"The GMAT that I am taking will be on October 3rd." This sentence doesn't mean "The GMAT is on Oct. 3rd" because that isn't true of all GMATs; the "that" clause specifies which GMAT we're speaking of.
However, "which" can be used to introduce essential information when the proper construction places it as the object of a preposition, since "that" cannot be the object of a preposition. For example:
"The country in which we found the greatest oil deposits was Venezuela." Here, "in which...deposits" is a modifier introducing essential information, but we can't say "in that" for a relative clause, so we keep "which."
Finally, and most importantly:
Which vs. That is not tested on the GMAT. Neither is the comma rule for "which" mentioned above. The only thing that matters on the GMAT is that "which" and "that" both must always refer to the noun or noun idea immediately preceding them. If you're choosing between two answer choices based on "which" vs. "that," you are going to get that question wrong. [/b]
