From: Cognitive Psychology: In and Out of the Laboratory by Kathleen M. Galotti, Third Edition, 2004, Wadsworth Publishing.
Short Term Memory:
Short term memory is broken into three distinct parts based on the modal model of memory.
The phonological loop, where we remember sounds, is about 2 seconds of information for up to 2 minutes depending on if you rehearse the information or not. That is, if you are trying to remember a phone number, but someone is distracting you while you are attempting to remember it, the information will fade by about 2 minutes. If you are able to rehearse it, by repeating it over and over, it can be as long as you rehearse it.
The visuospacial sketch pad, where we are able to keep something visualized for a quick rememberance, can store about 1-3 images, depending on personal ability. You are not really able to rehearse the VSSP (the visuospacial sketch pad) since you are constantly bombarded with new visual input which can mask (displace) the information attempting to be remembered. Information in the VSSP can last for about 30 seconds until it decays into uselessness.
By using chunking, as js_africanus has stated to group information for easier storage in short term memory, will increase the phonological loop’s storage capacity, it is still limited in ability. First, you can only chunk so much information into one chunk and that information still be useful. Second, you can only store so many chunks before you start forgetting some of them. (Regardless of chunking or not, if all the information is presented at once, people usually forget the middle portions of information. The remembering the beginning and ending is called the primacy and recency effects.)
Long Term Memory
While the above posters are correct in that the theoretical limit of information that a brain can store could be well-nigh infinite, the brain is limited by the number of neuron synapses (the gaps between individual neurons).
The average brain has about 10 (to the) 13th power of synapses. Thus, the theoretical brain could store that many bits of information at once.
However, that might just fry your brain. The average number of neuron impulses in a persons lifetime is about 10 (to the) 20th power. Thus, that might be how much a person could theoretically know per lifetime.
However again, most people do forget stuff. Thus, the average adult at middle age, about 35, could recall and use 1 billion bits of information.
For a more complete (and technical) answer to the long term memory capacity, please refer to:
Landauer, T. K. (1986). How much do people remember? Some estimates of the quantity of learned information in long-term memory. Cognitive Science. 10, 477-493.
Do you feel as though I have answered you sufficiently?