Not sure what to do

Because the var x = 1; is set outside of a function, it because a global variable and because you use x without stating var x = Math.sqrt(cSquared); then JavaScript assumes you are using the global variable.

To complete the task you can either add var in front of the x inside the function, like so:

  function hypotenuse(a , b) {
    var cSquared = a * a + b * b;
    var x = Math.sqrt(cSquared);
    return x;
  }
  hypotenuse(x, y);

Or you can simply define a completely different variable like so

  function hypotenuse(a , b) {
    var cSquared = a * a + b * b;
    var z = Math.sqrt(cSquared);
    return z;
  }
  hypotenuse(x, y);

To create a variable that's local to a function, you need to add the var keyword inside the function. In this example, there's a variable named x outside the function -- in the "global" space -- and that same variable is used inside the function. This changes the value of x in the global space. In other words, this code

x = Math.sqrt(cSquared);

Changes the value of x outside the function, but this code

var x = Math.sqrt(cSquared);

Creates a new local variable named x which doesn't affect the outer, global x variable.

Hope that helps. If not, try watching this video again: http://teamtreehouse.com/library/javascript-foundations/variables/scope-2

isnt the difference between global and local mean the placement, whether it is inside or outside the function of block code?

so in this case would you call x outside of the function just above the hypotenuse or below it?

You're almost there, below it. It's in the right place as far as whether or not it needed to be inside/outside the function, but since the it declared ABOVE the hypotenuse function call, when the hypotenuse function runs it changes the value, so you just need to move the global variable below the function call in order to not affect it's value. Though that's not exactly the correct way.