This one is so prevalent on the Web, it has almost become ignored by logophiles. Unlike "there" and its variants, the words "its" and "it's" only have one difference, and no one seems to care what the hell it is. Just for the sake of being thorough, I'll spell it out: "its" is the possessive of something, as in "the weight of the Buick big-block is its weakness."

The other way of putting the word, with an apostrophe, is just a contraction that means "it is". "It's midnight" just means "it is midnight." Try this: whenever you see the word "it's", sound it out in your mind as "it is" and you'll see that it makes the mistake pretty annoying.