To be considered non-fiction, I believe that a book must be mostly true. Everyone remembers the way events occur in a different way, and everyone exaggerates certain things. If these occurrences appear in a memoir than I believe that this is okay, and is still considered a truthful story. However, if the author includes very extreme exaggerations and makes up events that didn't really happen then I believe that the writer needs to let the reader know, "Hey, this didn't happen exactly like this." I don't think the genres "label" matters as much as the author being truthful to the audience. The genre doesn't matter as long as it is publicly known what is true and what isn't.
For example, if an author included in a so-called "truthful" story that he went skydiving, but in reality has never done anything of the sort, than he could just add in somewhere between the book covers that that event never really occurred. This way, the author is happy because their book is the genre they chose it to be, the reader isn't lied to, and everyone gets to experience an interesting story.
I also think that half-truths are okay to include in non-fiction stories, as long as the consumer has some way of knowing that the complete truth isn't being told. If a reader wanted to read something that they know is fake, they would be reading a fiction novel. Not a memoir. At least to me, stories have more of an impact on me when I know that they are true. The thought of, "This actually happened," is a powerful thought that really moves you. If a reader is directed in a way of believing something is true when it's not, it gives the author credit they might not necessarily deserve.
Genre lines are very important to me and I strongly think they are needed. When people look for a book, most of the time they are trying to find a specific genre, and for the most part genres categorize books well. There are exceptions to when books might not fit a specific one, but there are exceptions to every rule. Overall, having genres put books into a category fits very well.
