I think there's a mix. Like if you go to bed remembering and repeating all your stuff in your head, your brain kinda saves it in the 'Finder' equivalent in the brain. But waking up when you're fresh is good too. Like, I like to record speeches on my iPod and fall asleep listening to them, I remember them better. But if it's fact based stuff I like doing it in the morning.
That's what I do, I set my alarm for like an hour earlier than normal. I'm more focused and my brain just absorbs the information better. Plus, there's a sense of urgency - the test is in a few hours - which isn't present the night before, so I don't get distracted.