Goto: Layout> Edit Html...

Under this panel, using your browser`s search feature [CTRL+F], search "templatesblock"...click next untill your will reach the code below. Just Replace "TemplatesBlock" [highlight with capital letters] in the code with your twitter username and click Preview to see your twitter updates. Save when done.

<div class='pngfix' id='toptwitter'>
	<h2><a href='http://twitter.com/TEMPLATESBLOCK' target='_blank' title='Follow Me'>Follow me on Twitter<i>!</i></a></h2>
	<div class='toptwittermsg'>
		<ul id='twitter_update_list'><li/></ul>
		<script src='http://twitter.com/javascripts/blogger.js' type='text/javascript'/>
		<script src='http://twitter.com/statuses/user_timeline/TEMPLATESBLOCK.json?callback=twitterCallback2&amp;count=1' type='text/javascript'/>
	</div><!-- /twittermsg -->
</div>