i'd go with iv: whether the participants used recall or recognition as a measure of retention, and dv: the amount of nonsense syllables retained/remembered
i think where you're getting confused is you might be remembering the dv as 'the thing being measured', and so you went for amount of time because it's a numerical value. remember that an experiment is testing a relationship between variables - you want to see whether the independent variable seems to have an effect on the dependent variable.
you change the IV to see if it has any effect on the DV. the thing being changed between the groups is the measure of retention being used (i.e. recall or recognition), so that's your IV. and you'll notice that it asks you to 'score the lists' by counting how many nonsense syllables they retained. and bam, there's your DV!
hopefully that helped a bit, feel free to ask if you need anything cleared up
