Hello U_U,
Both NiCd and NiMh can exhibit the memory effect. However, you have to work very hard to do it.
If you discharge a battery exactly the same amount each time you use it and recharge it exactly the same amount, after a few hundred cycles you will see the memory effect.
In actual flashlight use it is difficult to do this.
NiCd's are more robust than NiMh's. You can leave them on the charger for an extended period of time and they will handle the slight overcharge better. That is why flashlight manufacturers use them. The change to NiMh cells has happened because of the increased capacity of those cells.
NiMh cells pack more power into the same sized package. Their energy density is higher. A high capacity NiMh AA cell is rated at 2300 mAh. By contrast, a high capacity NiCd AA cell is rated at 1400 mAh.
Both types of cells benefit from a full discharge cycle (down to 0.9 volts per cell) periodically. NiCd's like a shorter period like once per month, NiMh's a longer period like once per 3-6 months.
Tom