I don't have this happen so much anymore. If I've had a conversation with someone once, I won't always remember their name, but I generally remember their face if I've talked to them.
Of course, during college, I was the on campus computer fixer guy (at one point for all the dorms, except one). So everyone knew me on what was a small campus. I came back the year after graduation to visit, and I'm taking the elevator up to my friend's room and a gal gets in the elevator and greets me by name, asks how I'm doing, starts talking about how she's been doing, etc.
I have 0 idea who she is. None. Doesn't even look familiar. I wonder if I must have been fixing her computer and just sort of making conversational noises while she was talking to me or something, and that's why she thinks we are sort of friends? I still am not sure. Anyways, I awkwardly fake my end of the conversation until we both get out of the elevator and start to part ways.
And then she nails me on it. "You don't remember who am I do you?" I figure I probably have a 1 in 20 chance of making up a name and having it be the right one, and so a 95% chance of making it more awkward. So I cop to it. She sort of smiles awkwardly and bids me a nice day. Ah well!