Leosghost - 6:50 pm on Dec 21, 2005 (gmt 0) I prefer American english ..but bending the rules does not negate their existence ..
Actually, "it's" is a contraction for "it is" or "it has."
The rule is that if you make a contraction you substitute the missing letter by an apostrophe
The mark (') used to indicate the omission of one or more letters from a printed word
Thus it is it's even when it's the it's you are referring to ..possessive or not ( actually there is an argument to be made for your cited ( it has ..contracted ) example being a possessive usage anyway but presumably you are posting from the USA ..
I prefer American english ..but bending the rules does not negate their existence ..