Concept:
The standard equation of an ellipse is $\frac{x^2}{a^2} + \frac{y^2}{b^2} = 1$. The eccentricity $e$ describes how elongated the ellipse is. If $b > a$ (a vertical ellipse), the formula for eccentricity is $e = \sqrt{1 - \frac{a^2}{b^2}}$.
Step 1: Write the equation in explicit standard form.
The given equation is:
$$x^2 + \frac{y^2}{4} = 1$$
This can be explicitly written as:
$$\frac{x^2}{1} + \frac{y^2}{4} = 1$$
Step 2: Identify the parameters $a^2$ and $b^2$.
By comparing the equation to $\frac{x^2}{a^2} + \frac{y^2}{b^2} = 1$, we extract:
$$a^2 = 1$$
$$b^2 = 4$$
Step 3: Determine the orientation of the ellipse.
Since $b^2 > a^2$ ($4 > 1$), the major axis is along the y-axis.
We must use the vertical ellipse eccentricity formula:
$$e = \sqrt{1 - \frac{a^2}{b^2}}$$
Step 4: Substitute the values into the formula.
Plug in $a^2 = 1$ and $b^2 = 4$:
$$e = \sqrt{1 - \frac{1}{4}}$$
Step 5: Calculate the final value of the eccentricity.
Find the common denominator and simplify the square root:
$$e = \sqrt{\frac{4}{4} - \frac{1}{4}}$$
$$e = \sqrt{\frac{3}{4}}$$
$$e = \frac{\sqrt{3}}{2}$$
Hence the correct answer is (D) $\frac{\sqrt{3{2}$}.