Common knowledge says that if you don't fully discharge your cells every time you use them, then you lose the capacity that occupied the un-discharged portion. This is true. More or less

'Memory Effect' is really just a combination of two things: cell aging and voltage depression. Rechargeable batteries lose capacity over time. Fact of life, nothing you can do. Voltage Depression is something that happens to any form of energy storage, not just rechargeables. When you apply a load, the voltage drops. When you apply load to an alkaline battery, the voltage drops, and when you apply load to a rechargeable, or, better yet, a lithium battery, the voltage drops quite a bit less.

While memory effect does occur, it only happens when the cell is discharged to the same point and charged to 100% over and over again without any overvoltage. Also, memory effect only happens in sintered plate NiCd cells, which are most likely not what you are using. Moreover, any overvoltage will erase memory effect. Memory effect happens in laboratory testing equipment, satellite power systems, and practically nowhere else.

On a pedantic note, a battery refers to two or more cells linked together. So a car battery is really a battery, because it has multiple cells, but a rechargeable AA (or E91, LR6, AM3 yadda yadda yadda)is actually a cell.

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http://www.repairfaq.org/ELE/F_NiCd_Memory.html
^^Greatly useful.