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basstard writes:

BBC has a nice article:

Storing information so that you can easily find it again is a challenge. From purposefully messy desks to indexed filing cabinets, we all have our preferred systems. How does it happen inside our brains?

Somewhere within the dense, damp and intricate 1.5kg of tissue that we carry in our skulls, all of our experiences are processed, stored, and - sometimes more readily than others - retrieved again when we need them. It's what neuroscientists call "episodic memory" and for years, they have loosely agreed on a model for how it works. Gathering detailed data to flesh out that model is difficult.

But the picture is beginning to get clearer and more complete. A key component is the small, looping structure called the hippocampus, buried quite deep beneath the brain's wrinkled outer layer. It is only a few centimetres in length but is very well connected to other parts of the brain. People with damage to their hippocampus have profound memory problems and this has made it a major focus of memory research since the 1950s.