From Halopedia, the Halo wiki
Permanent Invisibility is a glitch that can be achieved on any level in Halo 2 where you play as the Master Chief or any multi-player map in Halo 3. Below are tutorials to obtain permanent invisibility.
It only works on the current level and does not transfer to the next. Also, if you wish to retrieve the Envy skull from the campaign level "Delta Halo" to achieve permanent invisibility on a later level, be aware that after doing so, the permanent invisibility glitch will cease to work.
This glitch works by deactivating the invisibility ability while you are invisible, therefore tricking the system into thinking you are supposed to be in your current state and keeps you that way. Unfortunately, the system is programmed to keep the flashlight from turning on while you are invisible, so you will not be able to use the flashlight even though you can still hear the sound.
Note: If you are on Xbox 360, quitting to Dashboard has the same effect.
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