As a speaker of English as a second language, I really notice this quirky error. I notice it a lot in this community, in the blogs and forum entries, but also on official pages (the latest: The PW Directory, front and centre).
"its" means the thing belongs to the thing. "it's" means "it is". The simplest test would be:
assertTrue( "it is" == meaning_of( $phrase ) );
IOW, if you can write "it is" right there, it's OK to write "it's". Otherwise, always always write "its".
Sorta grumpy today.