As Paul mentions, this has been brought up several times in the past and opinions vary on the subject.

I vote ported.  That was the factory method on all ’57 and up Y’s but there are instances where manifold vacuum can provide an increase in fuel economy over the ported vacuum but many times at the expense of some drivability issues in cruising situations.  Regardless of the vacuum method used, disconnect the distributor vacuum line when setting the intial timing.

Here are some past threads related to ported and unported vacuum use to the distributor.

http://www.y-blocksforever.com/forums/Topic30767-3-1.aspx

http://www.y-blocksforever.com/forums/Topic31878-3-1.aspx

http://www.y-blocksforever.com/forums/Topic21110-3-1.aspx

http://www.y-blocksforever.com/forums/Topic11631-3-1.aspx

http://www.y-blocksforever.com/forums/Topic1213-3-1.aspx