1st of all (x-y^2)/4(x+1) = [math]\dfrac{x-y^2}{4}*(x+1), \ not \ \dfrac{x-y^2}{4*(x+1)}[/math]
2nd, where does it say or even imply that y=x+1? So why say that y=x+1. y is the least upper bound while x+1 is an upper bound. The best you can say is that y < x+1.
You keep making statements about inequalities as if they are equalities. You can't do that!
3rd, (x-y^2)/4 * x/4x = (x-y^2)/16. Now (x-y^2)/16 < (x-y^2)/2 so when you add (x-y^2)/2 you get less that x-y^2! Now when you add y^2 to that you get x, which is what we wanted! So why did we choose epilson = (x-y^2)/[4(x+1)]? Because it worked, that is we got the initial expression to be less than x. Can you think of another expression which epilson could have equaled?[/math]