Jimmy knows Leonard, he says something to the effect of "Hey memory man, what are you doing here? Where's Teddy?" I think before Leonard even says anything. Then when Leonard is killing Jimmy he says something about Sammy Jenkins and Leonard knows he's just killed the wrong man.
When...
I saw it a second time this weekend. You get a much better understanding of it the second time. I highly recomend it.
Answering a few questions that I saw brought up. This is only my interpretations, not fact.
Dodd, who I really had no idea what he had to do with the film the 1st time I saw...
Wow, there was a flashback with his tattoo saying "I did it". It makes perfect sense to me, deep down he knows he did it, but he's covering it up with his selective memory loss.
Something else that I didn't see, but my girlfriend did, is during the flashback to where Sammy is giving his wife...
My interpretations of this film and discussion.
Leonard is the one that killed his wife, with the overdose of insulin. This Sammy Jenkins character may have existed before his condition started, so he convienently remembers it that Sammy is the one that did it.
Now how has he changed that...