I had to change my twitter password so that instagram accepted it. My old password contained special characters, probably the twitter api or instagram didn't like. After changing it - it works. If that's a bug on twitter's side i still want to point this out for people who might have the same problem - the char i used was "&"
Thanks for bringing this to our attention. Unfortunately, in V1.0, we have a bug that causes Instagram to crash when trying to connect a third-party service (twiter, foursquare, etc.) if the password you're using for that service contains an ampersand (&). We'll have a fix for this in our next version. For now, if you want to connect to one of these services, you'll need to make sure that your password for that service doesn't contain an ampersand. We sincerely apologize for the inconvenience, and again, we promise to have a fix for this in the next version.