Yeah, I got this one wrong. I'm struggling. If google translate is to be believed, there's more than a subtle difference though (you can listen here, click the microphone on the left side in the box). "Det" is much longer and the "e" sounds more broader than the short/quick "dig" https://translate.google.com/#sv/en/det.%20dig
I think that having reached level 25 in Swedish, it may be time for you to look beyond Duolingo. :) Don't get me wrong, I love to see people here, but we don't exactly offer a platform that allows you to try your wings after you've already gone through the course repeatedly.
Both can be used. It depends on the noun that was previously mentioned. If there was no noun mentioned, the default is the one here.
Do you like that car? No, I love it- Tycker du om den där bilen? Nej, jag älskar den ('den' refers to the car)
You do the exact same with 'det'.