Fractions become easier to compare when we have the same numerator or the same denominator. Notice that 1/root(x+y) = root(x+y)/(x+y).
We want to know if any of I, II or III must be larger than root(x+y)/(x+y). Note that this must be positive, while III can be negative, so III does not need to be larger.
I has the same numerator, and it would be larger if its denominator, 2x, was certain to be smaller than x+y, i.e. if 2x < x+y, or x < y. We don't know whether x is smaller than y, so I does not need to be larger than root(x+y)/(x+y).
II has the same denominator as root(x+y)/(x+y). We thus want to know which has the larger numerator. That is, if we knew that
root(x+y) < root(x) + root(y)
was always true for positive x and y, we'd know that II must be larger than the quantity in the question. Well,
[root(x+y)]^2 = x+y < x + 2root(xy) + y = [root(x) + root(y)]^2
so II must be larger. Or you can look at it this way:
Of course we can make a right-triangle with legs of length root(x) and root(y). By Pythagoras, the hypotenuse will be root(x+y). But the sum of two sides of a triangle is always greater than the third side:
root(x) + root(y) > root(x+y)
which is what we were trying to prove.