Razor, Load the Dutchess up to the same pioint as in my picture above and click the browse button instead of the next button, then in the window provided navigate to the hard drive that you have loaded your TS12 to for instance:-
If you loaded to the E: drive the route would be.... E:\Program Files (x86)\N3V Games\TS12 and click on the Trainz icon (Trainz.exe) and press enter, and every thing should load.