If "it" and "that" are used as a pronoun, how do I choose between them?
For example,
The dictionary is very helpful; without it, I don't know what the word means at all.
The dictionary is very helpful; without that, I don't know what the word means at all.

Are they both correct?
Thanks in advance.

on the gmat, and in formal written english in general, you can't use the so-called 'pointing words.' those are the four words 'this', 'that', 'these', and 'those', used by themselves as pronouns. big fat no-no. the second one of these two sentences is, therefore, incorrect.

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the above is of course not meant to say that those four words are forbidden in general. you can, of course, use 'this', 'that', 'these', and 'those' as adjectives (these people, that book, etc.), or in specialized constructions wherein parallelism lends them meaning (such as 'beethoven's symphonies were more revolutionary than were those of bach').

Thanks Ron.
Speaking of parallelism, I just wonder whether "that" can refer to "X of Y" in a comparison sentence.
For example,
Between 1997 and 2001, the growth of the US economy was more than that between 2002 and 2003.
Can "that" correctly refer to "the growth of the US economy"? Or "that" can only refer to only *one* preceding noun? Or "that" considered "pointing word"?
Thanks in advance.

my understanding (which is supported by the gmat examples) is that, if you're going to use a 'that of'/'those of' substitution, the two parts must have EXACTLY the same grammatical structure.**

so, for instance, the following would be deemed acceptable:
The growth of the US economy between 1997 and 2001 was faster than that between 2002 and 2003
notice the EXACT correspondence between the two parts.

your version, on the other hand, wouldn't be deemed acceptable, because one part is just 'the growth of the u.s. economy', and the other part is '[the growth of the u.s. economy] between 2002 and 2003'. not parallel.

'that' is not a pointing word in the construction 'that of', and neither is 'those' in 'those of'.

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**one exception: the two different forms of the possessive (X's and ...of X) are considered parallel. so, for instance, you could say
Beethoven's symphonies were more revolutionary than those of Bach
and the two possessives would be considered parallel.