When calculating flood recurrence intervals, do you use annual instantaneous peak flows?
I think you should just follow the guidelines provided by the USGS for this calculations (http://water.usgs.gov/osw/bulletin17b/dl_flow.pdf). From there you can read: 


  "Flood events can be analyzed using either annual or partial-duration series. The annual flood series is based on the maximum flood peak for each year. A partial-duration series is obtained by taking all flood peaks equal to or greater than a predefined base flood".


They also provide a list of FAQs (http://water.usgs.gov/osw/bulletin17b/bulletin_17B.html) and a way to calculate them.