You still have to submit all grades taking in college even if you transfered, so you shouldn't be concerned if it shows up on your transcript or not. But if you believe that you can get higher then your B- do it up, it will be averaged over GPA when you apply. I would really only recommend this if you were positive you could get an A though, it might not really look to good if you can only pull of a B for the second time doing a class.
I am not 100% positive on the average of the grades if they are taking at 2 different schools though. Does anyone have a positive answer for this?