My friend wanted me to post in this topic to clarify things to you. i am experenced reverse engineer, created many bots, hacks, antihacks.
Example of MU multicheats:
Fatality mu considered to be one of best protected around there
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MuNoMercy using XTeam
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Not gonna make a showoff here, just want to drop some knowledge bombs. The problem of MU online is that the game concepts are wrong. There is too much on client side which normally shouldnt be there. You CANNOT prevent speedhack because thats the client who makes server "believe" where he is thus u can move faster with some modifications. But you will say - "okay so we will make memory integrity check to see if someone has patched something" - you are wrong. My hacks do not modify even one byte of programs code and still i can modify anything i want. People creating antihacks do not have basic idea of operating systems, malware (so how to be stealthy), and internal structures which can be easly exploited by bots to gain complete stealth.
OP asked if " 1) Packet encryption to avoid packet hacks. 2) Virtuallization to avoid memory hacks. " is sufficient. Answer is no.
1) Good packet hacks do not work at the "lowest level". I dont even care what your encryption is - any algorithm u put there does not matter at all - and still i can send any packet i want. How? Simply - i dont inject packets but i feed the game engine all valid data and the engine creates the packet, executes the whole underlying code and encrypts it for me. You have no chance to detect this.
2) It is my machine. I am the owner of the memory and i can spoof anything. Not gonna add that simple kernel module will circumvent all your checks. Your approach is goin to work only agains newbies or people using premade scripts.
And to finish - i did not step on any good anticheat in MU ever. Everything takes 15 min to analyze (xteam. muguard, igc, llah and others), all that so called "protection" is just worth poop.
if you have any questions i will gladly answer