Given $\epsilon > 0$ we want to $\delta > 0$ such as $|x - 0| < \delta \Rightarrow |f(x) - f(0)| < \epsilon $.
How \begin{align} |x| = \begin{cases} x, \text{ if } x > 0\\ -x, \text{ if } x < 0 \end{cases} \end{align}
From desigualities we have
if $x > 0$ : $|x - 0| < \epsilon$
and if $x < 0 : $
$|-x - 0 | < \epsilon \Rightarrow |-1||x - 0| < \epsilon \Rightarrow |x - 0| < \epsilon$
Because this, we take it $\delta = \epsilon$.
So, $|x - 0|<\delta \Rightarrow |x - 0|<\epsilon$.
Therefore, for definition $\lim_{x \to 0 }|x| = 0$
It's right?
With the hints I rewrited like this: Given $\epsilon > 0$ we want to $\delta > 0$ such as $|x - 0| < \delta > \Rightarrow ||x| - 0| < \epsilon $.
As $||x| - 0| = |x|$ we have that $|x| < \epsilon$ so we take it $\delta = \epsilon$.
So, $|x - 0|<\delta \Rightarrow ||x| - 0|<\epsilon$.Therefore, for definition $\lim_{x \to 0 }|x| = 0$
You are looking at the wrong definition. What you need should be the definition of $\lim_{x\to 0}f(x)=0$, not $\lim_{x\to 0}f(x)=f(0)$. The latter is the continuity of $f$ at $x=0$. The function $f(x)=|x|$ is indeed continuous at $0$ though.
The estimate you want should be $$ ||x|-0|<\epsilon. $$
You don't need to discuss two cases. Simply observe that $$ ||x|-0|=|x| $$