How to make a real apostrophe or single-quote in LaTeX

Use the upquote package; even if the package documentation doesn't mention alltt, it works also with it:

\documentclass{article}
\usepackage{alltt}
\usepackage{upquote}
\usepackage{color}
\usepackage{fullpage}

\begin{document}

\begin{center}
\LARGE hello.py
\end{center}

\begin{alltt}
{\color{red}print} 'hello world'
\end{alltt}

\end{document}

Notice some modifications to the input.