Cuál literally means which "one" (among several items of the same kind), whereas qué means what "thing". Before putting qué, ask yourself whether it'd make sense to add "cosa" or "objeto" after qué, like this: Qué cosa es tu color favorito? (doesn't make any sense). Qué cosa/objeto es eso/a/e? (here does make sense).

I think it's almost the same as the difference between which and what. When using qué, you say: Que es eso? because there is no range for you to choose from just as you will say what's this? not Which is this? The object "eso" is pointing at is quite clear already. When using Cuál, you've got a range. As your example goes, Cual es tu color favorito? 'cause there're only several colors in the world, thus there is a hiding range behind the sentence which we usually omit as "Among all the colors, which one is your favorite? " Therefore we usually use Cual here. That's my own understanding. Hope it will help you/