Setting the transform.position not working

I'm a bit confused as to what's happening here. The position of my transform is not changing despite me setting it to a zero vector. Here's the code. Any ideas why this change isn't taking?

 Vector3 v = new Vector3(0, 0, 0);
 GameObject o = Instantiate (_playerItem.PlayerWeapon.WeaponPrefab, v, transform.rotation) as GameObject;
 o.transform.parent = weaponContainer.transform;
 o.transform.position = v;

The gameobject is a prefab object. It loads correctly, however it looks like the position of the vector is takes is an offset to the parent transform to achieve a zero vector. That is, summing o.transform.position and o.transform.parent.position gives a zero vector. Why? And, how can I make it's position be a zero vector?