Permanent invisibility is a glitch that can be achieved on any level in Halo 2 where you play as the Master Chief. There are seven simple steps.
1) Get the Envy Skull.
2) Save and quit.
3) Start any level with the Master Chief.
4) Play the level until you get a checkpoint, then restart the level. (You keep doing this to have a good idea where/what triggers the checkpoint)
5) Once you know exactly when/where the checkpoint is, engage your Active Camo, then trigger it. Once you get it, revert to last to see if you are invisible at the checkpoint. If not, try again.
6) Once that is done, save and quit, and reset your Xbox.
7) Resume that same level and you will be invisible for the rest of the level! When you shoot or get shot, you will stay invisible, and even though enemies cannot see you, they may fire in your general direction so just be careful.
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 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 programed 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.
This can also be achieved in Halo: CE. Pick up the first Active Camouflage you see after boarding the ship and use Devtrainer's Time Freeze. Then bump-possess someone, preferably an ally. Wait about 20 seconds and undo the Time Freeze. Then repossess your body. This often tricks the game into thinking that your camouflage is still frozen in time. You should be able to have your camouflage for the rest of the level, which is a big help on higher difficulties. Note: this sometimes might not work as your camouflage will sometimes wear off.