As I said in class, I am not going to expect memorization of formulas or algorithms. The ideas are more important than the memorization of things you could look up, so if you need a definition, formula, or algorithm, I'll give it to you. However, I'll expect you to understand the formulas, definitions, and algorithms covered in the readings, with a higher emphasis on things we discussed in class. Also, I will not totally blindside you with lots of questions from the readings that are completely unrelated to what we covered in class, to test whether or not you did/studied the readings. On the other hand, if you study only what we discussed in class, ignoring everything else in the readings, I can't promise you won't get bitten on some question.
Again, especially on algorithms, but also with issues in general, the understanding is what's important. Knowing how to walk through algorithms we discussed: good. Being able to demonstrate you understand the ideas behind algorithms rather than just doing it by rote, e.g. pros and cons: better. Understanding an algorithm well enough to modify it for some purpose: even better.
That said, here are some specific things you can safely ignore in your studying. (Section numbers from Manning and Schuetze.)
I hope that this provides you with some useful guidance. My goal is to write an exam that is interesting (to you), informative (to me), and fair (to all).