I don't forget rules. I might not be familiar with a rule and miss it that way, but after that I don't forget that rule either. My short-term memory is about average, but my long-term memory is almost perfect. I can tell my players how a particular situation would have played out in every edition of D&D since BECM, incorporating any house rules I had added back when I was DM-ing it.
I run a decent tactical game. I often run my monsters so well I find myself making sub-optimal choices to keep an obvious TPK from developing. No, I didn't forget the monster could breathe fire - he just decided the party probably had some kind of fire resistance and didn't use it (the party didn't, and the fire breath would have killed everyone it hit).
My NPC's are about 75% friendly and generally very useful. The PC's actually trust them, so when one does betray them they actually feel hurt - but not so hurt that they stop trusting NPC's altogether. I should also add that they rarely exceed the party's level, and are usually a level or two back so they can prove useful without stealing the thunder - unless they crit. I can't really help it if some NPC fighter suddenly chops a BBEG for 66 damage.
In one of my campaigns, the Norse god Loki (god of trickery) confided with the party that he was quite jealous of his "stupid brother" Thor. When Thor lied, everyone believes him! When Loki tells the truth, no one believes him! "Given that, is it not actually logical that I lie all the time?"