To perm a mule is it 1hours gametime or 2hours?

2 Hours.

2 hours in a game. (just sitting in a channel does not count as time)

I suggest leaving the game every 15 to 20 minutes and rejoining because if/when a rollback happens it also rolls back the time you have been sitting there.

Leaving the game a few times during those 2 hours will ensure that time amount will be locked in.

This guide should be helpful : http://forums.d2jsp.org/topic.php?t=40677392&f=21