In MIKE SHE, the saturated zone is only one component of an integrated groundwater/surface water model. The saturated zone interacts with all of the other components - overland flow, unsaturated flow, channel flow, and evapotranspiration.
By comparison, MODFLOW only simulates the saturated flow. All of the other components are either ignored (e.g. overland flow) or are simple boundary conditions for the saturated zone (e.g. evapotranspiration).
On the other hand, there are very few difference between the MIKE SHE Finite Difference method and MODFLOW. The differences that are present are limited to differences in the discretisation and to some differences in the way some of the boundary conditions are defined.
Main saturated zone dialogue
The top dialog for the saturated zone section is slightly different depending on whether or not the Linear Reservoir Method (V1 p. 299) or the 3D Finite Difference Method (V1 p. 300) is chosen.