In most style books it is recommended that you spell it out fully. If you however insist to typeset it as per the question use as follows:
\documentclass{article}
\usepackage{mathpazo,amsmath}
\def\inch#1{#1''}
\def\ft#1{#1'\thinspace}
\begin{document}
6'\thinspace30''
%or
\ft2\inch6
\end{document}
You can use the same method for typesetting time this way as well. You can create commands to suit. Even better to typeset it straight into SI units and let TeX do the conversion.
\documentclass{article}
\usepackage{mathpazo}
\usepackage{fp}
\usepackage{siunitx}
\def\inch#1{#1''}
\def\ft#1{#1'\thinspace}
\def\inchtomm#1{%
\FPmul\result{#1}{25.4}
\FPround{\result}{\result}{2}
\SI{\result}{\mm}}
\begin{document}
6'\thinspace30''
\ft2\inch6
\(\inchtomm{8.5}\times\inchtomm{11}\)
%or
\(8.5\thinspace\text{in}\times 11\thinspace\text{in}\)
\end{document}
If you absolutely need to typeset it in inches, use 8.5~in or \mbox{8.5\thinspace in}. Both are acceptable ways from a typesetting point of view.
Edit
Had a look at a few guides. The image is from Science and Technical Writing, a Manual of Style, 2nd Edition by Philip Rubens. (Highly recommended)

The overall consensus in the context you describe is to spell it out in full words. In tables, the inches appear as a heading and the by symbol used i.e., 5 x 10
The abbreviated form in text can take a stop or be left out in.; as units in my early Engineering Books always used it as in i.e., lb/in etc.
\newcommand{\inches}{\ensuremath{{}^{\prime\prime}}}and set it without any space between the numeral and the unit? It looks aesthetically okay to me... – Werner Feb 28 '12 at 5:49siunitx, the package focuses on SI units. – Yiannis Lazarides Feb 28 '12 at 5:57