Which and That... very tricky and often confused!

That: refers to some
Tiffany likes emeralds, that are expensive.
(The emeralds can be expensive or inexpensive. Tiffany likes expensive ones.)

Which: refers to all

Tiffany likes shoes, which are expensive.
(Shoes are expensive.)

Some important links
1. http://home.earthlink.net/~llica/wichthat.htm
2. http://grammar.quickanddirtytips.com/which-versus-that.aspx
3. http://grammar.ccc.commnet.edu/grammar/notorious/that.htm
4. http://www.kentlaw.edu/academics/lrw/grinker/LwtaThat_Versus_Which.htm

Another way to look at this and which...

That introduces essential clauses while which introduces nonessential clauses.
Examples:	I do not trust products that claim "all natural ingredients" because this phrase can mean almost anything.
	We would not know which products were being discussed without the that clause.
	The product claiming "all natural ingredients," which appeared in the Sunday newspaper, is on sale.
	The product is already identified. Therefore, which begins a nonessential clause.
NOTE:	Essential clauses do not have commas surrounding them while nonessential clauses are surrounded by commas.

Also...

If this, that, these, or those has already introduced an essential clause, you may use which to introduce the next clause, whether it is essential or nonessential.
Examples:	That is a decision which you must live with for the rest of your life.
	Those ideas, which we've discussed thoroughly enough, do not need to be addressed again.
NOTE:	Often, you can streamline your sentence by leaving out which.
Example:	That is a decision which you must live with for the rest of your life.
Better:	That is a decision you must live with for the rest of your life.