What version of TWRP? I'm running 2.3.1.0 with no problems. Just use the toolkit, flash the TWRP recovery that is included...
Make sure you have the rom.zip of whatever rom you are flashing on your sd card and PC. Also go into developer settings and make sure USB debugging is on.
Then the bottom left box of the toolkit has a "flash a kernel", (whatever rom you are trying to flash, make sure you extract the boot.img to the /data/kernel directory of where you installed the toolkit on your PC)
Select "boot to bootloader" in the toolkit, then flash kernel through toolkit, as soon as it says "press any key to continue" in the cmd prompt on PC, reboot phone back to bootloader (if it reboots itself and goes past the bootloader, don't worry, you can still get back, just use the toolkit to send command or hold power button and volume DOWN button on phone til screen turns off, then let go of power, but continue to hold volume DOWN button til you see bootloader menu)
Now go into recovery, select wipe>factory reset and system (some roms will do this durring installation, but it is always wise to do this first).
After wiping, go to install, and select the rom.zip from where you put it on the phone. MAKE SURE IT IS THE SAME ROM.ZIP YOU FASTBOOT FLASHED, otherwise it may not boot.
After installing the rom, reboot the phone. First boot may take a lot longer than usual, this is normal
EDIT: if you have not put the rom.zip on your phones sd card yet, you can select "mount" in TWRP, then "mount USB" to add files from your PC (the computer should recognize your phone as long as you have the drivers installed)