Do I need to take bowel prep for a capsule endoscopy?

Yes for best results. Best results are obtained by swallowing the capsule after good bowel prep. It has minute digital camera, which takes pictures when passing through the small bowel, well prepared gut will give best accurate pictures of pathology (diseased area) than unprepared bowel.
Yes. Capsule endoscopy is usually used when a standard upper endoscopy and colonoscopy have not identified the souce of a patients symptoms. The lining of the small intestine cannot be seen by these procedures. The capsule takes pictures as is progresses through the small intestine to try to find the source of the problem, so yes, one must get the stool out of the GI tract.