y has more than one valid result so you can't solve for it exactly (you being the 89). The calculator gets confused by things like this as it must differentiate an equation in the form of y= such and such. The symbolic math on an 89 is not all that powerful. Try it in mathcad or maple and you will get the correct answer(s).
The 89 does not handle complex numbers very well at times. Depending on the value of x y can be complex in that equation.
To clarify a bit:
When the ti-89 solves something symbolically how you type the symbols makes all the difference. If you simply put 'y' instead of y(x) it will not know if the variable is dependant on x or not, it will assume not and give you the answer as if y were a constant. In this case the answer you get may or may not be a valid expression. For instance, try to differentiate x+5=0; the answer it gives is 1=0 which "May not be a valid equation".
On the other hand, if you put in y(x) it will know that y is itself dependant on x. However, y(x) can't be trivially solved for based on what I said originally (it is a quadratic expression and y has more than one valid result, some of which may be complex functions) so it will simply write that the derivative of y(x) is the derivative of y(x)... not very helpful but the equation will at least be valid

. So for this equation you get a variety of y'(x) terms strewn about with the calculator making no attempt to solve for y.
Differentiation doesn't make sense in cases where the variables are not variables. The calculator returns the may not be valid because it assumes y is a constant and thus x is sufficiently defined and differentiation does not make any sense. If you use y(x) then the answer ill be correct but it will not express what y'(x) actually is, jsut give a more or less meaningless equation involving y(x), x, and the derrivative of y(x).