1) Use of non-parity memory sticks
The manuals on ttrk and stason show only parity rams in dram configuration section, but it does work with non-parity sticks under DOS when BIOS is loaded as "power-on defaults". It can only find 64KB RAM and gave "on board parity error" if "BIOS defaults" are loaded. I tried loading BIOS with “power-on defaults" and setting everything the same as "BIOS defaults" and got no error. I again tried loading "BIOS defaults" and setting everything the same as "power-on defaults" and the error came out. So I guess some hidden settings between these two "defaults" have toggled the parity switch.

2) Recover from "on board parity error" with non-parity sticks
Once the error occurs the board halts before I can get into BIOS. So far the only way I can recover from the error is to induce "CMOS battery state low" error by shorting pin 3 and 4 of JP2. Leaving the board un-powered overnight will also induce the same battery error. This will let me get into BIOS, load "power on defaults", save and exit. If I save the BIOS directly without loading anything the parity error will pop up on the next boot. So I think the fail-safe defaults of the BIOS include active parity, which explains why a simple power down won't work as there is no internal/external battery on the board. BTW I tried pulling out BIOS chip and it doesn't work, and there is no clear CMOS jumper.