3 Player Local Co op
From Halopedia, the Halo wiki
The 3 Player Local Co-op glitch allows players to bypass the two-player limit when playing Co-op in the Halo games. In Halo: Combat Evolved and Halo 2, this is done strictly through modding; only in Halo 3 is it possible with a glitch.
Halo 3 is shipped with the ability to launch two-player Co-op mode on Local Play; or with four players over Xbox Live or System Link, using at least two Xbox 360s. However, it is possible to log a person in to a Local Play game just before the game starts.
First of all, you will need to log in to two profiles on Local Play; they can be either temporary profiles or gamertags signed into Xbox LIVE. Select your level and set up the game as any difficulty. Get Controller 3 ready, but don't log in with it.
Using Controller 1 or 2, start the game. As the timer counts down, press A on Controller 3, and select Temporary Profile. Wait for the screen to fade, and select Yes just as the screen goes completely black. If you select it too soon, the screen with return to the lobby and the count down will stop; to remedy this and reattempt the glitch, sign Player 3 out of the lobby and sign them back in, bearing the instructions in mind.
Please note that when using this glitch on a level containing Cortana Moments, the game will freeze when the Moment occurs. Oddly, though, Gravemind Moments play just fine. This is likely because of the effect used in order to make Cortana appear on the screen, as Gravemind Moments only change the player's field of view and overlays a screen effect, much like the recording on Jenkins' helmet in 343 Guilty Spark. The two effects are very much different in that one is animated and the other is an overlay, although both play a sound clip and slow the player down.
Because of this, the best levels to use this glitch on are:
This glitch also works for Halo: Reach campaign and firefight. You can also use your own gamer profile by clicking the A button to start the game; Then in the 5 seconds it gives, sign in using your gamer profile. After the game starts a message will appear saying that 3 players cannot play, and will start you off with just the 2 first players. Quit the game, then start the game over. Right or a little bit after the 5 seconds is up click A, it might ask you to choose a memory device, so just press A quickly. It might not let the 3rd player spawn on the map for firefight, if this happens just restart the game, do not quit. Also, for firefight try to let the 3rd player select his/her loadout first. There will be no moments where the game freezes and all players will gain experience. If the 3rd player does not spawn with a certain weapon or falls out of the falcon on the first level you can restart. You will have to do this after every game if campaign scoring is on.
A good tutorial can be found here.
This happens because the third and fourth players are able to join during the countdown. When they join while the countdown is initiated, the level starts before the game realizes there are too many people in the game.