There was an article written a long time ago about the different types of memory. I wasn't particularly interested in it at the time, but IIRC it said that new experiences go initially into short term memory. If they are not refreshed or brought to the surface occasionally, they are effectively lost, but if they are mulled over for a while, they can be transferred to long term memory, from where they can be retrieved years later.

And I think that's a good thing. Does anyone with any sense really want to remember, perfectly, all that's ever happened to him or her? Everything, good, bad and indifferent? Not Pygmalion likely!

My own personal opinion is that all memories remain, but the links that bring the less used memories back to conscious knowledge get broken. I see no other way of explaining how some random concatenation of circumstances can bring back to full consciousness a long-lost memory - you know, like "That reminds me of .... Good Lord, I'd completely forgotten about that!" On a rather grimmer note, I suspect that hypnogogic images which the mind can throw up are also fed into memory. I suspect that these form part of the mechanism that has allowed some people to be wrongly convicted of particularly nasty molestation offences, years after the event, under hypnotic regression. Does anyone really want to remember things like that?