Can W3 be used to send music from my Onkyo surround sound receiver to a pair of Audioengine powered speakers for rear surround speakers in a 5.1 system?

Yes, simply connect the W3 Sender to the rear channel preamp outputs on your surround receiver then connect the W3 Receiver to an input on Audioengine or any other powered speakers. The W3 has stereo (1/8″) inputs and outputs that will also connect to RCA connector with the use of the included RCA Y-cable adapter.