Hmmm ... growing up I had a friend that completely believed his own lies. And if you were present for some memorable event, you couldn't convince him that his memory of that event was incorrect. I'm guessing he was missing that fold!
"Not So Fast: The study only shows that the PCS and reality monitoring are linked, not that the presence or absence of the PCS is what causes some people to be better than others at this sort of memory task. It could be that another factor in brain development causes both small PCS and poor reality monitoring, for instance." (from the article)
I think the "Not So Fast" section was my favorite part of the article. You rarely see these reminders that science is a work in progress in popular science reporting. Particularly with regards to medicine, too often I see too much hype over the results of a single unrepeated study.