To find the derivative of x^x using the limit definition, the limit lim [(x+h)^h - x^h]/h as h approaches 0 is crucial. It simplifies to ln(x) by applying the properties of logarithms and the exponential function. The discussion emphasizes using the expansion of e^(ln(x)) and the Taylor series for log(1+h) to derive the limit. Understanding these expansions helps clarify why the limit equals ln(x). This approach is essential for correctly calculating the derivative of x^x.