Step 1: Concept
The acceleration due to gravity at height $h$ is given by:
$$g' = g\frac{R^2}{(R+h)^2}$$
Step 2: Analysis
We are given $g' = g/2$.
$$\frac{g}{2} = g\frac{R^2}{(R+h)^2} \Rightarrow \frac{1}{2} = \frac{R^2}{(R+h)^2}$$
Step 3: Calculation
Taking the square root: $\frac{1}{\sqrt{2}} = \frac{R}{R+h}$.
$$R+h = \sqrt{2}R \Rightarrow h = (\sqrt{2}-1)R$$
Final Answer: (C)