APPLYING THE PATCH 3 IS HIGHLY RECOMMENDABLE TO REDUCE CTDs.
Uninstall any previous versions of TFW or any other mods if present. Best to simply delete Gamedata folder.
If you haven't modified the fsgame.ltx before, you have to open it in Notepad change
$game_data$ = false| true| $fs_root$| gamedata to
$game_data$ = true| true| $fs_root$| gamedata
^^^^^^^^^^^^^^^^^^^This is important^^^^^^^^^^^^^^^^^^^^^^^
Just remove the Gamedata folder.
Disclaimer: This is not my instalation file. I deleted mine long ago. I found this one and it seems to work fine. Please report any problem you may encounter.