Words that occur in similar contexts in raw text tend to have similar syntacto-semantic properties. These similarities in distribution can be exploited by using vectors of co-occurrence counts as quasi-syntactic word representations (Schuetze 1995; Finch 1993). In this paper, the notion of a Lexical Space is formalized and an experimental study is presented which examines the effects of various biases and information sources on the organization of the similarity space. The distances in the Lexical Space are then (re)used as a similarity gradient in a Memory-Based Learner for several well-known NLP disambiguation tasks (PP-attachment, POS-tagging, Word sense disambiguation). The results are compared to the Modified Value Difference Metric (Stanfill\& Waltz, 1986; Cost \& Salzberg, 1993), similarity metric that only takes into account the distribution of words in the supervised training data.