My parent are on Social Security with total income less than $6000/year and supplement security income of $6500/year. If I provide rent and other living expenses for them, could I add their income with ours and claim them as our dependents on our tax return?

To claim your parents as dependents they must meet the requirements as "qualifying relatives," which means:

1. Each must have income less than $3400 (that's taxable income, so depending on who is getting SSI that may disqualify one or the other), and
2. You must provide at least half their support.
3. They themselves can not file as Married Filing Jointly

One other thing - if you were to treat them as dependents you don't just add their income to yours - if they are required to file their own taxes, they report their own income on their own return. Off hand it sounds like they are not required to file, however - if they do not file for 2007 they will be ineligible to receive the stimulus payments that are coming out starting in May. The IRS is relying on 2007 tax filings to determine who is eligible - so they must file to get a payment. And as already noted - if they do file as MFJ, you cannot claim them as dependents.