All memory is encoded at the cellular level. (McClaskey, Thomas R. D.C., C.H.T., B.C.E.T.S Decoding Traumatic Memory Patterns at the Cellular Level. 1998.) (http://www.aaets.org/arts/art30.htm)

Single cells are capable of learning through environmental experiences. They are able to create cellular memories, which they pass on to their offspring. This means that genes are not set in concrete at birth. Environmental influences (e.g., stress, nutrition, emotions) can modify the genes without changing their basic blueprint. Those modifications can be passed on to future generations. (Lipton, Bruce, PhD. The Biology of Belief. P. 38-67. CA: Mountain of Love/Elite Books, 2005)

At the heart of this new field of epigenetics is a simple but contentious idea — that genes have a 'memory.' That the lives of your grandparents — the air they breathed, the food they ate, even the things they saw — can directly affect you, decades later, despite your never experiencing these things yourself. (BBC, Ghost In Your Genes.) (http://works.bepress.com/cgi/viewcontent.cgi?article=1001&context=gary_marchant)