From what I understand, there are 3 fatty acids which are "Omega-3" -- your body needs a bit of all of them. Flax seed provides one (ALA), fish oil provides the other two (DHA and EPA). The ideal is to actually eat fatty fish rather than the pills if you can, because I think a lot of the longer-term studies that show protective benefit are actually historical studies of people that eat a lot of fish (and the pills may not provide the same benefit). But don't listen to me -- here is the Mayo Clinic web site:
Omega-3 fatty acids from the Mayo Clinic
It also gives some information about the dosage if you page through the whole thing. I have read elsewhere if you eat 12-16 oz of fatty fish a week (salmon, sardines) that provides enough without taking pills.
On the flax seed -- unless they're crushed, they pretty much pass through intact except for the few you manage to crush with your teeth, and the Omega-3 goodness stays locked inside. I look for the crushed but then you have to keep them in the fridge or freezer because they can go rancid like walnuts. If you have a mortar and pestle you can crush them by hand. I have tried a blender and food processor and those don't work, they just spin around in there.