We plan to invite my parents to US on B-2 visa to look after our 1yr old toddler. We plan to have them stay for 1 yr (6 month + another 6 month extension). We will pay them for the help, the question is, can we pay them out of the Dependent care account or not.

Reading IRS pub 503, we definitely meet the Qualifying person, Earned Income and Work-Related Expense Test, and we don't plan to claim my parents as our dependents, so can they then be the care provider and receive the payment?

Thanks.

On B2 visa they can not work.
You can claim your parents as dependent (qualifying relative) if
1. You provided more than half of their support, and
2. the parent did not earn more than $3,500 in 2008.

They must be resident of the U.S. If they complete 183 days in a year, they meet substantial presence test.
Read Your U.S. Tax Return: Substantial Presence Test
Read about Qualifying Relative: : Your U.S. Tax Return: Requirements for claiming a dependent