I have water pouring out the pipe connected to the Temperature / Pressure Valve. It has never happened before I released the pressure and water kept pouring out. It has stopped now. Do I need a new water heater or is it the T/P valve?

It could be both but I'd start by only replacing the T&P valve. When a T&P operates due to high temp or highpressure they release but then stop when the danger clears. If water kept pouring out your valve was stuck. Do you recall if the lever was raised when you can into the room, raised like possible someone else raised it for kicks and then got scared and ran off?

There are other reasons a T & P valve will leak water.
1) You installed a back flow preventer but not a expansion tank and the pressure built up.
2) Mineral buildup got in the seat and won't let it close. **OR**
3) the valve just went bad and needs replacing.
I think I'd go with door #3 to start with. Good luck, Tom