The .twmrc is not a shell script--it's actually written in a language specially made for twm, believe it or not! The main thing people like to play with in their .twmrc is window style (colors and such), and making cool menus, so here's an example .twmrc that does that:
Whew! Believe me, that's not even the most involved .twmrc I've ever seen. It's quite probable that some decent example .twmrc files came with your X. Take a look in the directory /usr/lib/X11/twm/ or /usr/X11/lib/X11/twm and see what's there.
One bug to watch out for with .twmrc files is forgetting to put the & after a command on a menu. If you notice that X just freezes when you run certain commands, chances are that this is the cause. Break out of X with - - , edit your .twmrc, and try again.