Firstly, re-install UDK. Then edit the ini files to add your project as defined in the starting guides, by adding a +EditPackages entry so that your code gets compiled.
Then leave the ini files alone!
Next, don't bother cooking your game. Cooking is for producing milestone test builds, not for daily development. All you need to do is recompile the scripts either from the frontend app, or with a command line like this:
Now you have two options for testing your game. You can either fire up the editor, load your map, click on View-> World Properties -> GameType and set both the DefaultGameType and GameTypeForPIE to your project's GameInfo class. That allows you to test the game in the editor.
D:\UDK\UDK-2012-01\Binaries\Win32\UDK.com make -debug
Alternatively, a more efficient way to iterate builds when coding is to launch the game through the commandline, specifying map and gametype.
Use this as your workflow until you gain more experience and confidence. The command lines above can be executed through desktop shortcuts, or with the features of your IDE (code editor). Later you can search the forums for ways to tweak the ini's and get cooked builds to run correctly.
D:\UDK\UDK-2012-01\Binaries\Win32\UDK.exe TestMap?game=Sandbox.SBGame -log -remotecontrol -nostartupmovies