OMG, that always pisses me off.
The word "its" is the only singular possessive I know of which does not separate the noun and the s with an apostrophe, and is accepted as such by the MLA. However, the MLA dictates that the term "it's" should be separated into the two words "it" and "is". Thus, the exception to the rule is granted that exception based on the informal breakage of another rule. The entire situation is so ridiculously unnecessary!
EDIT: FURTHERMORE! The terms "it", "that", and "those" are also considered informal when used as subjects of a sentence! ARRG!
