Step 1: Compute partial derivatives for \( (x,y) \ne (0,0) \).
\[
f_x(x,y) = \frac{\partial}{\partial x}\left(\frac{y^3}{x^2 + y^2}\right) = \frac{-2x y^3}{(x^2 + y^2)^2}
\]
\[
f_y(x,y) = \frac{\partial}{\partial y}\left(\frac{y^3}{x^2 + y^2}\right) = \frac{3y^2(x^2 + y^2) - 2y^4}{(x^2 + y^2)^2} = \frac{y^2(3x^2 + y^2)}{(x^2 + y^2)^2}
\]
Step 2: Evaluate at (0,0).
\[
f_x(0,0) = \lim_{h \to 0} \frac{f(h,0) - f(0,0)}{h} = 0
\]
\[
f_y(0,0) = \lim_{h \to 0} \frac{f(0,h) - f(0,0)}{h} = \lim_{h \to 0} \frac{h^3 / h^2}{h} = 1
\]
Step 3: Check continuity of \( f_y(x,y) \) at (0,0).
Along the line \( x = 0 \): \( f_y = 1 \).
Along the line \( y = 0 \): \( f_y = 0 \).
Hence, \( f_y(x,y) \) is not continuous at (0,0).
Step 4: Differentiability.
Since partial derivatives exist but are not continuous at (0,0), \( f \) is not differentiable at (0,0).
Final Answer:
\[
\boxed{(C)}
\]