Prove that this works for all $x$ and and only some $y$ $$\sqrt{(x-1)^2-(y+2)^2}=0.$$
This is as far as I got so far
Difference of squares:
$\sqrt{(x-1-y-2)(x-1+y+2)}=0$
$\sqrt{x-y-3}\sqrt{x+y+1}=0$
Therefore $x-y-3=0 \implies y=x-3$
$x+y+1=0$ and $y=-1-x$
I just don't know where to go from here?
What you must mean (and it really helps to write it clearly) is that for all $x$ you can find a $y$ that makes the statement true and you can find another $y$ that makes the statement false. So given an $x$ you can exhibit a $y$ that makes the statement true-just solve for $y$
$$(x-1)^2=(y+2)^2\\y+2=\pm(x-1)\\ y=\begin {cases}x-3\\-1-x \end{cases}$$ Either of these $y$'s will work, which you can show by plugging back in. Now let $y=x-4$, for example, to show that there is at least one $y$ that doesn't work.
Note that if you choose $y$ first, the same thing happens. For all $y$ there are some $x$ that work and some $x$ that do not work.