According to a recent study by Kim Curby and Isabel Gautier of Vanderbilt University, we can remember faces far better than, say, wristwatches or cars.
“Our results show that we can store more faces than other objects in our visual short-term memory,” says Gauthier. “We believe this happens because of the special way in which faces are encoded… Being able to store more faces in VSTM may be very useful in complex social situations.”
Addendum May 17
I was intrigued by Erik's comment about hair and beards, and noticed the lack of them in the pictures that were used for the experiment, so I asked Dr. Gautier the following: "Have you factored in the role that hair or beards play in facial recognition? Does it code or store differently from other features given that it can be more variable?"
She replied: "In general, our work and that of others focuses on mechanisms that appear to distinguish face processing - the internal features of faces are processed in a more holistic manner (not as parts, but as a whole) than other objects. In the context of experiments where we only use a limited number of faces, hair might be SO helpful that people would rely on it entirely and we could not study how internal features are processed - so they are generally excluded."
Vanderbilt University report, link and article in Science Daily, link.