Many students learn that you're and your sound different in English. Well, not in connected speech. A lot of the time, when we speak fast, the two of them sound exactly the same. As a matter of fact, the sound is so similar that a considerable number of native speakers eventually swap one for the other when writing. If you are ever in doubt, remember: your is used in the same situations you can say my, while you're is used in the same situations you can say I'm:

Your intelligent friend is here.

(My intelligent friend is here)

You're nice.

(I'm nice)

This type of error is considered very basic, and people who confuse you're and your may be considered less intelligent.  Check out the example from Friends, where Ross criticizes Rachel for making this specific mistake. What he means to say is she is a stupid person for making that mistake:

By the way, Y-O-U-apostrophe-R-E means "you are." Y-O-U-R means "your!"



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