The Cliff's Notes version of torpedo engagments is that you want to shoot at where the boat will be at point of impact, not where it is. For this, I prefer to use the 3 minute rule to plot the position that my torpedo and ship will meet. That is, speed x 10=distance traveled in 3 minutes. That will be the last step, which will allow me to position my boat and set the gyro for the shot.
Of course, you'll need range and AOB before you use that. Getting that data is not so quickly explained, so you should deffinently look at some of the TDC tutorials in the sticky here:
http://www.subsim.com/radioroom/showthread.php?t=164131