As banana bread odor wafts past my nose, I am reminded of many things. Unlike Proust, the infamous author of "Remembrance of Times Past" though, I do not plan to write thousands of pages on my memories.
People have known for some time that smell has a peculiar link to memory. When we sniff something, we can often conjure up the episode when we last smelt that smell, including how we felt. Also in Korsakoff's syndrome, olfactory memory seems oddly untouched by thiamine deficiency.
We also literally smell with our brains, so perhaps this is not all that surprising. The amylagda, important in fear/anger response, also receives inputs directly from the olfactory bulb and helps form emotional reactions to odors.
Therefore, you will never catch yourself thinking wistfully "that smell smells rather odd, kind of like eggs that's gone rotten, what should I do?" Instead you'll be screaming "AHHHHHH ROTTEN EGG ODOR, GET OUT OF HERE" and leaving in time to avoid inhaling lethal amounts of hydrogen sulfide. Or to avoid ingesting more of rotting food. And so on.
Rats have been shown to only need 1-2 trials to learn to associate a smell with an experience. Dogs have been shown to have much keener smell-memory of people after 1-2 exposures than people have of people's appearance, and be much more reliable about it.
Dogs in fact can discriminate between different body parts of people; most "mistakes in identification" appear to be from the dog not having smelled enough to make a match to the person. They almost never make false matches.
Now, a recent issue in Science mentions that if you are exposed to a smell while learning a task, and then later smell that during slow-wave sleep, you can remember the tasks MUCH better. This is interesting.
Mice have a stronger sense of smell at night, thanks to their circadian rhythms . But they are nocturnal animals that are normally awake at night. We don't know when our sense of smell is most acute, although hordes of pregnant women would probably personally vote for early to mid morning. Gack.