The first equation is an expansion of the function [tex]x\sqrt{1 + x^2}[/tex] in a Taylor series at zero, using the binomial series.
The second equation is a statement that the series expansion is bounded by a constant multiple of [tex]x[/tex]. This is true only near zero, not near infinity (near infinity, [tex]\sqrt{1 + x^2}[/tex] looks like [tex]|x|[/tex], so [tex]x\sqrt{1 + x^2}[/tex] grows quadratically). Near zero, the written-out version of the big-O notation is: there exist constants [tex]C > 0[/tex] and [tex]\delta > 0[/tex] so that, whenever [tex]|x| < \delta[/tex], [tex]|x\sqrt{1 + x^2}| < C|x|[/tex]. This statement is abbreviated [tex]x\sqrt{1 + x^2} = O(x) \textrm{ as } x \to 0[/tex].