They probably did not end up in a Chinese village. There is a story that the village of Liqian was settled by Roman soldiers who were captured at Carrhae, somehow found themselves as part of a Xiongnu army, and were then captured by the Han Dynasty at the Battle of Zhizhi about twenty years later, where they were recorded as soldiers who fought in a "fish scale" (ie, testudo) formation. It is a fantastic story, and one that has been enthusiastically embraced by the village's inhabitants, but not terribly likely. The twenty year difference is one of the problems, as is the question of how they would get there, as it isn't exactly a straight shot from Parthia to the Xiongnu.
Unfortunately, the only ones we know of for certain are those that were involved in the negotiations between Augustus and the Parthians in 20 BCE for the return of the standards. Some had killed themselves after the battle, some were sent back to Rome, and some had decided that they had lived in Parthia for over thirty years (most of their lives for the majority) and stayed.
It's not exactly clear. It seems they were taken east--far east. Take a look at this story, of Chinese people possibly descended from Roman soldiers of Crassus' army.
There are two (reasonable) explanations of what was done with the troops.
The first is that they were used as labor. The Roman armies were even then renowned for their building prowess, and so it wouldn't be strange for the Persians to have put them to work. Whether as slaves or paid workers, I can't say.
The other is that they would be used as soldiers on Persia's eastern border. They could never be used in the West, as there would always be the possibility of them escaping. But bring them east, make them fight as your border guard. The Roman legionary and Persian cavalry would have been a formidable force.
We know that Augustus negotiated the return of the standards, but I have yet to find any word on the troops.
Some additional reading. http://www.historynet.com/roman-persian-wars-battle-of-carrhae.htm
