Step 1: Concept
Use the identity $\sin^{-1} \theta + \cos^{-1} \theta = \frac{\pi}{2} \implies \frac{\pi}{2} - \cos^{-1} \theta = \sin^{-1} \theta$.
Step 2: Analysis
$\sin^{-1}(\frac{x}{1+x}) = \sin^{-1}(\frac{1}{2})$.
Therefore, $\frac{x}{1+x} = \frac{1}{2}$.
Step 3: Calculation
$2x = 1 + x \implies x = 1$.
Final Answer: (D)