best way to connect audioengine b1 to my HK3490 receiver. Optical cable or RCA's

Optical digital is not voltage input/output dependent. In other words, it doesn't matter. Optical will maintain the digital data to the AE DAC.

Yes, optical will deliver all digital data, but since D/A conversion timing is extracted from this data, any changes in timing (time jitter) will convert to noise.  It will depend greatly on the quality of digital output as RCA connection will depend on quality of analog outputs.  All DACs have ability to suppress jitter, some better some worse.  You have to try it for yourself.  Glass Toslink might be a little better than plastic one.

Whichever way sounds best is best.