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That is a very good question. I am not fully familiar with this topic, but from what I have found they are compatible, and Flickr images do show up in Google image searches. That is not to say "all" Flickr images will show up, it is still at the mercy of the search engine what is displayed.
The original location of the image in Flickr would be the place that Google would find the image. Here is a link to the Flickr forum where this topic is discussed: http://www.flickr.com/help/forum/en-us/99539/. It sounds like adding tags and descriptions to your images is helpful.