Two factors here.
1. Our cones (sensitive to bright light only; 3 types transmitting differential information based on color and brightness, and PACKED) are focused in the fovea, a very focused region in the center of the retinal.
The rest of our retina has more sparsely dispersed rods (sensitive to lower levels of light, do not transmit any color information) and a "few cones here and there" (or maybe no cones at all. I can't remember).
The region of space that the fovea region receives light from is small; on the order of 1 degree. So I guess that's what's being talked about here.
2. ATTENTION. It's been shown (I don't have a reference handy) that people's attention can become "focused." For example there was a study of eyewitness testimony where eyewitness memory accuracy (and confidence) was tested in two scenarios. In the first, somebody demanded their money. In the second, somebody pointed a gun at them and demanded their money. The confidence of recall of the identity of the thief was the same in both conditions, but the accuracy significantly decreased in the second (with gun) condition. The reason? The participants focused their attention on the gun, not the attacker.
I think this 'attentional' point is important, as well as schraf's earlier point about our memory systems. Clearly studies have shown that, due to the structure of our memory systems and the way we store things, memories are highly, highly reconstructive. It's almost pointless to call them reconstructive--there's just no available concept in there of "recorded" information. There is no such thing as "unprocessed" information. And especially for any information that was processed
consciously. That's so far downstream... anyhoo.
Ben