Step 1: Concept
Use trigonometric identities to simplify the numerator and denominator: $1+\cos 4x = 2 \cos^{2} 2x$ and $\cot x - \tan x = \frac{\cos x}{\sin x} - \frac{\sin x}{\cos x} = \frac{\cos^{2} x - \sin^{2} x}{\sin x \cos x} = \frac{\cos 2x}{\frac{1}{2} \sin 2x} = 2 \cot 2x$.
Step 2: Meaning
The integral simplifies to $\int \frac{2 \cos^{2} 2x}{2 \frac{\cos 2x}{\sin 2x}} dx = \int \sin 2x \cos 2x dx$.
Step 3: Analysis
$\int \sin 2x \cos 2x dx = \frac{1}{2} \int \sin 4x dx = \frac{1}{2} \left( -\frac{\cos 4x}{4} \right) = -\frac{1}{8} \cos 4x$.
Step 4: Conclusion
The resulting integral is $-\frac{1}{8} \cos 4x + c$.
Final Answer: (D)