There are high-res versions of important events. The locus coeruleus-noradrenaline system act in concerto with the amygdala to induce protein synthesis in the hippocampus to produce vivid episodic memories. It gets rewritten every time it's accessed, but it doesn't become abstracted away like the memory of mundane events.
Semantic memory is what we call our repertoire of facts and gists and otherwise abstract knowledge. You can lose your episodic memories while keeping your semantic memories and vice versa. Which is pretty cool.
Systems consolidation is the term for the hypothesized process where episodic memories are compressed and shipped out to the cerebral cortex for semantic storage.
You can use propranolol, a beta-blocker, to prevent noradrenaline from tagging a given episodic memory as "high priority" and you can sort of force it through the consolidation process this way. And yes, you can use it to treat PTSD.