In XML, you can use the entity '
for the apostrophe.
However, the android resource does some further processing after parsing the XML and requires that apostrophes to be escaped with a backslash - regardless of whether they are represented as a entity or placed directly in the markup. This has nothing to do with XML. See guidelines here. Yuck! XML already offer complete encoding for all possible characters, it is a shame that the android system decided to put this unnecessary layer this on top.
Finally, the formatting of a message for output requires that apostrophes be doubled because apostrophe is the escape character for Java MessageFormat.