1. Apostrophes are used to show a missing letter, for example:
you're instead of you are
can't instead of can not
2. Apostrophes show possession, for example:
the boy's bike
the student's desk
the students' desks (if there is more than one student)
If there are two or more students, the apostrophe comes after the 's'
3. Apostrophes NEVER show plurals!
"car's in the parking lot" should be "cars in the parking lot"
The Edrocker explains it best with the Monster song.