Firstly, we need to factorise the denominator:
x4 - 1 = (x2 + 1)(x2 - 1) = (x2 + 1)(x + 1)(x - 1)
So 
The partial fraction decomposition will be of the form:

We multiply throughout by (x2 + 1)(x + 1)(x - 1):
x3 - 2 = (Ax + B)(x + 1)(x - 1) + C(x2 + 1)(x - 1) + D(x2 + 1)(x + 1)
Let x = 1:
LHS = -1
RHS = 4D
So D = -1/4
Let x = -1:
LHS = -3
RHS = -4C
So C = 3/4
Coefficient of x3 on LHS = 1
Coefficient of x3 on RHS = A + C + D
Since D = -1/4 and C = 3/4, then A = 1/2.
Constant term on LHS = -2
Constant term on RHS = -B - C + D
This gives us B = 1.
So
